One of the factors that determine your liability as a broker is how you handle interactions with your carriers.
Brokers occasionally interact directly and frequently with the real truck drivers employed by their carriers.
In such partnerships, it has been successfully argued that the broker essentially adopts the driver as its employee and can be held accountable for their acts. The Sperl V. Henry case, which resulted in a $23.8 million judgment against the broker, is the best illustration of this.
It’s crucial to keep your distance from motor carrier drivers if you want to reduce your broker liability.
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Make sure to send the carrier, not the driver, a rate confirmation sheet.
When communicating load specifics (such as the kind of cargo, the route, the origin/destination, etc.), the shipper should send rate confirmation sheets to the carrier and not the driver. If a particular driver needs to get instructions, the broker should get in touch with the carrier and request that they do so.
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Steer clear of choosing routes for drivers
To achieve reduced freight broker liability, brokers should avoid specialized route selection. Brokers can advise carriers on routes, but they shouldn’t directly inform drivers of this. Any route-related information should be provided to the carrier so that the driver will receive it.
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Limit driver communication when dispatching
If at all possible, limit direct communication with the drivers. Dispatch communication between the broker and the carrier’s driver is fairly common and can sometimes be impossible to prevent. To reach the driver when necessary, it is preferable to use the motor carrier’s dispatch team of communications.
In the event that you do speak with drivers directly, make sure to follow up with the motor carrier.
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Be particularly careful to distinguish between the carrier and the driver while dealing with a one- or two-truck operation.
For many brokers who frequently work with motor carriers with one or two trucks, this might be a significant obstacle. When a broker speaks with the motor carrier as a company (“Henry Trucking Company”) rather than the driver directly (“Henry the driver”), it can be difficult to tell the difference. In emails, faxes, and any other papers, it should be made clear that communication is intended for the motor carrier as a corporate entity.
Control over drivers is limited
Frequently, individuals claim that in shifting responsibility for a loss from the freight broker to the motor carrier, the broker exerted excessive control over the driver’s behavior,
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Consider a freight broker who urgently needs to deliver a shipment of food items to a shipper. The broker got in touch with a partner carrier’s driver and gave instructions on when to pick up the shipment, which route to take, and what size refrigerated trailer to utilize in order to guarantee a timely arrival. Additionally, the broker spoke with the driver every day to inquire on the goods. The broker was sued by the motor carrier after the driver was involved in an accident on the grounds that the broker had authorized the driver’s actions and was therefore responsible for the damage.
- Making a separation between motor carriers and their drivers is crucial because it’s simple to exercise too much control over a driver
- Send all documents, including rate confirmation papers, to the motor carrier rather than the driver. Once you’ve teamed up with an established carrier, you can trust that they’ll provide critical information to their drivers.
- Never get in touch with a driver personally.
- Avoid making precise suggestions, such as routes, truck sizes, or the amount of mileage to be travelled each day. Instead, use a carrier’s dispatch staff to check on the status of a shipment.
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Pick your motor carriers wisely.
Hiring a motor carrier that is underinsured or has a poor safety record might expose you to significant responsibility, even though it’s always crucial to make sure you’re working with trustworthy companies. If a loss happens, the shipper could sue you in an effort to recoup any lost money. Additionally, you may be held liable for all or part of a loss if you hired an unreliable carrier or aren’t named as an additional insured on the carrier’s policy.
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Here are some recommendations to assist you in choosing reliable carriers and make sure you aren’t picking up some of their liability:
- Check the FMCSA website to see a motor carrier’s safety history.
- To be sure they have adequate coverage, including excess limits, obtain a copy of the carrier’s certificate of insurance.
- Request copies of any policies that may have an impact on the delivery of your shippers’ products from the carrier. Specified trailer use (such as the use of refrigerated or large trailers) and high-priority transport plans are a few examples of this.
- Establish the motor carrier’s status as an independent contractor in a solid broker-carrier agreement. To prevent taking on excessive liability, you should additionally include indemnification or supplementary insured conditions.
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Examine and bargain with consumer contracts.
In many customer contracts, the broker holds accountability for the actions of the motor carrier, bears responsibility for cargo damage, must deliver the shipment, or is otherwise held accountable as a motor carrier. Thoroughly examine contracts to ensure brokers do not receive excessive duties and liabilities, such as being responsible for cargo damage.
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Rules & Regulations.
Brokers should draught Terms & Conditions of Service that make it clear that they just arrange for transportation, not really provide it. Limitations of responsibility as well as other functional and legal terms should be included in the Terms & Conditions in order to protect the broker.
Broker Exclusions.
A disclaimer stating that the broker’s services are subject to the broker’s Terms & Conditions should appear on any papers that are routinely issued to clients (such as invoices, credit applications, and rate confirmations). In their email signatures, broker staff members should also add disclaimers and disclosures.
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Speak and behave like a broker.
The communication style and persona of broker staff should be that of a broker rather than a motor carrier. The personnel of a broker, for instance, should not express directly or implicitly that the broker is conveying the cargo. Similar to how the broker should be portrayed in marketing materials and website content, not like a motor carrier.
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