Having complete trust in other business partners could be achieved overtime when a healthy business relationship exists. However, this level of confidence is built when both partners are sincere and have a mutual understanding. It’s equally right to know how to determine whether a particular freight broker you intend to use is legitimate or not.
What are the benefits accrued to using a freight broker?
A good broker has an in-depth knowledge of the shipping industry as they employ all available means to achieve client goals. They also have extensive contacts of reliable carriers which may be difficult to locate.
Freight broker benefits include:
- They identify the best shipping option for you, thereby saving you time and money.
- They help to search for bid from various companies you may not find on your own.
- They ensure you get the best price possible on the carrier services.
- They have a good understanding of the required paperwork for different forms of transport and help to understand regulations.
- They help to solve most of your complex shipping needs.
Nowadays, we have companies acting as their freight broker as this saves cost. But, some of these companies still need to consult other freight brokers at certain times when they need to secure a critical load.
To find out if your broker is legitimate, you need to ask yourself these three fundamental questions:
- Is the broker duly registered with the UCR program?
The UCR is the acronym for Unified Carrier Registration which is mandatory for every broker and any broker engaging in commercial work will face the law if found out. You need to avoid any broker that does not have the evidence of registration.
- Is the broker insured?
It’s mandatory for every broker to be insured and show proof of its certificate. You need to check carefully to ascertain the correctness of all information on the document. Check thoroughly for the name of the insurance company, their policy number and also the date at which this is effective. You can even contact the insurance broker to verify and ascertain when such policy will expire.
- Is the freight broker bonded?
While processing the operating license for freight brokers, they are required to purchase a surety bond. This bond which is popularly referred to as BMC-84 is a fundamental requirement of FMCSA, and its purpose is to serve as a precautionary measure and also to ensure fair play. This works for the carrier if he/she isn’t paid the agreed amount, claims can be made against the bond, and all due payments will be received. The current minimum required amount for freight broker bond is $75,000. You can also find out about the broker’s active surety bond from the FMCSA’s website.
With all these in place, you can efficiently know whether to deal with a particular broker or not when you are satisfied with all these steps.