Why Validating Your Freight Carrier’s Operating Authority and Saftey Rating is Important
Finding a motor vehicle to work for a shipper and/or freight broker can be not just a task of sorting spreadsheets to determine the cheapest price freight service company.
The subjects of cargo insurance general business insurance safety rating and a valid motor carrier number issued by the FMCSA (Federal Motor Carrier Safety Administration) should be considered as part of a thorough screening process for onboard the carrier before giving to an asset motor company the very first bit of cargo.
The importance of checking the motor carriers of the logistics department of a company can’t be overstated.
A mountain of precedent in case law places the complete liability for road accidents in which person(s) dies or is crippled by the company who picked the carrier to move their cargo because they hired them to transport freight across the road. If the shipper didn’t hire the motor carrier to transport the cargo, the truck wouldn’t be operating on the roads.
If you decide to work with an agent for freight or another non-asset logistics service provider (LSP) it is crucial that they also are insured and have an active MC number. In selecting an unasset logistics company, you must also verify the carrier pool they have.
The screening of motor carriers employed by the company’s logistics team is not a one-time procedure. The most reliable logistic service provider and freight broker confirm the legality of their carriers based at least daily, with certain companies validating their carriers every hour with an external service.
The whole process is exhausting for truckloads due to its scattered nature. Based on the US Department of Transportation, there are more than 700,000 registered motor carriers, with 91.0 percent operating 6 or fewer trucks, and 97.3 percent operating less than twenty trucks.
How to Validate Freight Provider Has a Valid Operating Authority & Operating Safely
To verify whether freight carriers have the valid operating authorization, it can be verified by logging on to the Federal Motor Carrier Safety Administration (FMCSA) site and entering their number for MC.
This website will confirm that the business is legally operating and provide a complete history of any modifications that have taken place since its MC number was issued.
Items to be reviewed with a carrier’s Number for MC:
- Does the MC number legitimate?
- How long has the company been operating?
- Does the operator’s operating authority been canceled at any time during its history, and why?
The next step to screening the carrier after having reviewed the MC number that has been verified is to verify the safety rating of the company, which is done via the Safety and Fitness Electronic Records (SAFER) Website of the SAFER System.
Shippers should verify the safety record of the carriers they use to transport their cargo. Remember that having a good safety record could be a sign of a problem and you should do your homework. For instance, if a company has been operating for a long time, and has not had any inspections, this could mean they’re fronting the company with the status of an asset company, however, they broker all loads.
One red flag to look out for when looking over safety reports is when a company has high rates of a percentage of their service being out of commission. This could mean they are stopped on an almost daily size for further inspection through authorities like the Department of Transportation (DOT) due to past violations.
When the FMCSA records are reviewed, be sure you receive their certificate of insurance (COI) to confirm their overall insurance policy. Verify the dates of insurance policies and coverages, as well as deductibles.
Also, the procedure for vetting freight providers has to be conducted so that it is an integral aspect of daily business operations, and repeated on an ongoing basis to make sure the company that employs them remains in the same rigorous standards which got them through the first place around.
In certain situations, the best option that firms have taken is to engage an agent for freight or a logistic service provider (LSP) to handle all transportation to ensure that the pool of carriers is always monitored by industry-leading methods to safeguard its client base. In certain instances, this can be done by using a managed transport service solution, or through a non-asset provider similar to an asset motor vehicle.