BROKER?

Why would you need to open a brokerage just to deal directly with the shippers? Carriers can get work direct from a shipper just as easy as a broker can, maybe even easier as long as you control enough trucks to meet their volume of loads they want shipped. As a carrier you can then dispatch the excess freight you have to other carriers without needing to be licensed as a broker, which will reduce your over head expense and allow you to pass on a better rate to both the shipper and the carriers that haul the freight for you.

 

Isn't that exactly what a broker authority is required for? I thought that as a carrier, you can only dispatch to the trucks with your MC on them.

 

No, as a carrier you will be responsible for the load but you can give it to any other trucking company you want, it is called interlining and is quite common. I give my excess cars to other carriers daily and take some excess from other carriers, all the big freight companies do it. All you need is a contract agreement between your two companies. Below is the applicable section of 49 CFR Part 371 which pertains to brokers, note the definitions of broker and the applicability as found in 371.1 and 371.2 Bold and italics added for emphasis of my position.

§371.1 Applicability.
This part applies, to the extent provided therein, to all brokers of transportation by motor vehicle as defined in §371.2.

[32 FR 20034, Dec. 20, 1967, as amended at 62 FR 15421, Apr. 1, 1997]

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§371.2 Definitions.
(a) Broker means a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.

(b) Bona fide agents are persons who are part of the normal organization of a motor carrier and perform duties under the carrier's directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.

(c) Brokerage or brokerage service is the arranging of transportation or the physical movement of a motor vehicle or of property. It can be performed on behalf of a motor carrier, consignor, or consignee.

(d) Non-brokerage service is all other service performed by a broker on behalf of a motor carrier, consignor, or consignee.

 

Correct, the shipper does not care if you have abroker license, just an active motor carrier authority. Many prefer to deal directly with the carrier rather than have a broker involved. Think about the megas like Schneider, Swift, etc they get their work directly from the shipper, they have full time sales departments just to go talk to shippers to get the work.

 

Carriers can not tender loads to other carriers anymore without brokerage authority. It's been that way for quite a while now.

 

I do it every day, we have for the last almost 14 years. One of my largest customer is another national carrier, no broker authority, and they tender loads to hundreds of other carriers. You just have to have a contract in place and the bills are to be written to the carrier responsible for the shipment, they can't pass the buck down the line to the contracted carrier. SO lets say ABC Carriers has the contract with the shipper, they can give the load to XYZ Carrier as long as the bill of lading shows ABC Carrier as the carrier.

 

When you give cars to other carriers, are you keeping some of the money for the transportation of those cars?

 

Cars could be a separate issue don't know.According to fmcsa map 21 section 32915 tendering,brokering,or a freight forwarder must.be registered and financially covered bonded for $75,000