BROKER?

You could at one time broker a certain amount of loads out with no broker athority don't remember how many a month but it wasn't a lot. You can still do it but you don't want to be caught doing it.if your not registered and.bonded

 

I m not sure what kind of contact your referring to.I have contracts with brokers,as well as shippers.And the large national carrier you mentioned I'd be willing to bet they do have broker athority most large carriers do as well as contract and comman carrier athority.

 

Oscar, yes I keep some of the fees for the shipment, they way I do it is tender it to another registered carrier for a fixed amount that is not directly relevant to what my fees are but rather what the spot market is doing, actually some of the time I do lose money as I have set rates with my direct customers and some of them suck for single unit moves.

Pepper, I just ran them through safer tonight, using all the trade names I know they operate under and only one name comes up with any authority, common carrier. I can't find any broker authority under their name. Now that said, just because we have been doing it this way for a long time doesn't mean it is still correct, some of us dinosaurs do not change.

I am interested in this, have a call into my field office to see if I need to change the way I do things. It always used to be as long as the carrier with the contract to the shipper remained "in possession" of the freight it didn't matter who owned or operated the actual truck it was shipped on, provided they also were a fully authorized carrier. When I give another carrier the work it is invisible to the shipper and receiver, all the bills are made out to me and I know from past experience my insurance is liable for any damages while in transit. I will update when I have a formal answer from someone in authority. I would hate to give poor advice.

 

I would check into this, what it sounds like you are doing is brokering loads without a brokers authority.

 

Alright, here is the section of Federal law that covers being registered as a broker. 49 US Code ss 13904. If you look at the highlighted italicized section it clearly states that a motor carrier can arrange for transportation on behalf of their customers with other motor carriers without being a broker.

A motor carrier of property is a higher class of authority than a broker is. If every motor carrier that shares work with fellow carriers had to be a broker as well nothing would get moved in this country. So it appears that interlining is alive and well.

https://www.gpo.gov/fdsys/pkg/USCOD...title49-subtitleIV-partB-chap139-sec13904.htm

49 U.S.C.
United States Code, 2011 Edition
Title 49 - TRANSPORTATION
SUBTITLE IV - INTERSTATE TRANSPORTATION
PART B - MOTOR CARRIERS, WATER CARRIERS, BROKERS, AND FREIGHT FORWARDERS
CHAPTER 139 - REGISTRATION
Sec. 13904 - Registration of brokers
From the U.S. Government Printing Office, www.gpo.gov

§13904. Registration of brokers

(a) In General.—The Secretary shall register, subject to section 13906(b), a person to be a broker for transportation of property subject to jurisdiction under subchapter I of chapter 135, if the Secretary finds that the person is fit, willing, and able to be a broker for transportation and to comply with this part and applicable regulations of the Secretary.

(b) Registration as Carrier Required.—

(1) In general.—The broker may provide the transportation itself only if the broker also has been registered to provide the transportation as a motor carrier under this chapter.

(2) Limitation.—This subsection does not apply to a motor carrier registered under this chapter or to an employee or agent of the motor carrier to the extent the transportation is to be provided entirely by the motor carrier, with other registered motor carriers, or with rail or water carriers.


(c) Regulations To Protect Shippers.—Regulations of the Secretary applicable to brokers registered under this section shall provide for the protection of shippers by motor vehicle.

(d) Bond and Insurance.—The Secretary may impose on brokers for motor carriers of passengers such requirements for bonds or insurance or both as the Secretary determines are needed to protect passengers and carriers dealing with such brokers.

(Added Pub. L. 104–88, title I, §103, Dec. 29, 1995, 109 Stat. 884; amended Pub. L. 109–59, title IV, §4142(c), Aug. 10, 2005, 119 Stat. 1747; Pub. L. 110–244, title III, §305(e), June 6, 2008, 122 Stat. 1620.)

 

By the way, the information in US Code Title 49 ss 13904 is nearly identical to the information contained in the FMCSA Regulations, repeated here for clarity.

§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.

 

But as a motor carrier you are not brokering the shipment, simple arranging for another registered motor carrier to transport it on your behalf, which is perfectly legal as long as the bill of lading lists your carrier as the carrier of record, meaning you maintain the legal liability for the shipment. The big boys call it "purchased transportation".

 

I read that and think that I understand it and agree with your conclusion. (It sounds a lot like the old trip lease). Now for the insurance, with all of our o/o. They have to be approved by our insurance company, do you have to get each one of your carriers approved before they take possession of the cargo?

 

No, but my insurance is set up to allow me to sub contract without any input from the insurance company. Ultimately I am still liable for the cargo if the sub-hauler screws up so I am very picky with who I will share work with. I do make the sub-hauler name my company as additional insured so I can start a claim against their cargo or general liability policy in the case of damage.

 

Gotcha, thanks.