How to Vet Freight Carriers Like a Pro
Would you ever consider hitchhiking your way to New York or San Francisco? Most of us wouldn’t, of course. After all, what would you know about the driver and vehicle that randomly stops to give you a lift? Are the driver and vehicle insured? Does he or she have a safe driving record? Have they ever lost their license? Is the vehicle properly maintained and licensed? Do the tires have tread, and so on?
For the same reasons you won’t hitchhike cross country with a driver or vehicle you know absolutely nothing about, why would you entrust a half-million-dollar truckload of freight with a carrier you don’t know anything about? While most carriers have good reputations with equally good safety records, shippers, brokers and third-party logistics companies must still perform the proper due diligence before consigning freight to a firm.
Performing the appropriate due diligence on freight carriers is a laborious, but necessary task. You must cull little-known databases. Check references. Search financial records. The steps we take are many, but necessary, even though only about 5 percent of carrier hires and evaluations result in problems or issues discovered.
4 Great Carrier Vetting Tools You Can Use
Most third-party logistics companies perform proper due diligence on their carriers. However, processes can vary from company to company. The following are steps that can be taken to ensure you’re using the most trustworthy and reliable carriers. Over the years we’ve developed an extensive network of reliable carriers, as I’m sure you have too, unless you’re a new shipper. These are a few tools available for 3PL’s to manage carrier selection and qualifications:
- Carrier 411—This is a paid website but offers a free trial. The company bills itself as “The leading carrier monitoring service,” and that’s what it does. Its database contains nearly 900,000 businesses that are registered with the Federal Motor Carrier Safety Administration (FMSCA). We use this site to confirm current addresses of companies and to run a truck and trailer VINs and license plates to make sure nothing negative shows up in a search. The service also identifies carriers with a history of unethical behavior and companies that operate under multiple names or MC numbers to hide their true identity. These are so-called chameleon carriers—shady actors that accrue a string of strikes against them, often deficient safety ratings from the Department (DOT), then suddenly disappear only to reappear a month later with a new company name and new Motor Carrier (MC) number.
- DAT Carrier Watch—This paid service and website is used to collect and verify carrier insurance levels. The site also has a link to the Transportation Intermediaries Association’s (TIA) Watchdog report that displays TIA member reports about carriers.
- McLeod Software and an in-house TMS—We use these tools to keep track of all our carriers, including all the names of people who sign contracts plus their contact information. LPS also uses McLeod as well as Carrier Watch to connect with previous carriers.
- Secretaries of State websites—You can use various secretaries of state websites to confirm the owners and contact information of carriers, brokers, forwarders or other 3PLs.
Using a combination of all of these tools when vetting your carriers can be beneficial. They’ll help you find the chameleon carriers and those carriers or forwarders with a history of double brokering, a deceptive practice that’s against the law in most states.
DOT also inspects carriers continuously and rates them for safety. DOT ratings are typically satisfactory, unsatisfactory or conditional. The carrier usually has time to improve a conditional rating. A conditional rating, for instance, is given to carriers that do not keep up-to-date and accurate driving records, reflecting licenses and drug tests, to just name a few. Deficiency reports from DOT could include details on equipment maintenance and if a particular driver has any drug or alcohol violations.
LPS, as well as other companies will not work with any carriers with a conditional rating. Additionally, to prevent the possibility of working with a chameleon carrier, LPS does not work with a carrier unless its had an active MC number for a minimum of six months.
It’s also recommended you don’t work with carriers that require a fuel advance. If a company does not have money for fuel, what else does it not have money for? Insurance, or claims? Plus a carrier can disappear with the fuel money—that’s happened to me—and not deliver your load.
Want to work with a 3PL that has an extensive network of vetted carriers? Let’s get started.