Motor Carrier acting as a broker

Discussion in 'Ask An Owner Operator' started by SteveScott, Mar 19, 2019.

  1. SteveScott

    SteveScott Road Train Member

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    Been doing the O/O routine for a few months now and still learning the ins and outs. So I had my truck posted on DAT and received a call from a small trucking company who said that a truck they have on a dedicated run will be down for an extended period for repairs, and wanted to know if I could cover a load. It paid great, and I did the job. They deposited the funds directly into my bank account the day after I emailed them the BOL.

    When I picked up the load, I wasn't told to check in as their company. I used my own company info and there weren't any problems. Now they're asking if I would like to continue doing some loads for them, and honestly I would like to because it pays as well as direct freight with the shipper. My question is this. From everything I can find, they're a motor carrier only and not licensed as a broker. Am I open to any problems other than potentially getting stuck without being paid since they don't have a surety bond? Am I breaking any laws by accepting these loads from somebody who isn't a broker? Anything in particular I should be careful of or watch out for?
     
    Last edited: Mar 19, 2019
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  3. wichris

    wichris Road Train Member

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    So you hauled he first load without a broker agreement? There are dual authority carriers out there with the same MC# for both. Getting paid could be a problem sometime. Cargo claim also.
     
  4. Dennis McConnell

    Dennis McConnell Bobtail Member

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    is it company from SoCal ?)

    smh, any dispatch service operates that way...
     
  5. baha

    baha Road Train Member

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    CK. the load com, for any non compeat that you signed when you took the 1st load from them, start hauling and dont look back till its over?
     
  6. LoJackDatHo

    LoJackDatHo Medium Load Member

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    Most of the time, notice I said most, there are exceptions to this, but most small to midsize carriers don’t have dual broker/motor carrier authorities because of insurance reasons. Northland would not underwrite mine that way. I had to get a broker authority number separate. With that being said if they are larger self insured carrier, they could have both. Anyway they would be the ones illegally brokering loads without broker authority. For you to haul loads direct for them, they would not be able to keep any percentage of the loads they give you (illegal brokering). But they can tender you a load if they give you ALL the revenue. They are taking a much bigger risk on their end. What if you don’t have proper insurance requirements for their particular customer and there is a claim. That’s on them. Once you sign the BOL’s it gives you and your company possession of the load legally. As long as you are a legal carrier, you will be fine. Keep in mind this is a gray area, but if you’re being paid, I’d run it. If you don’t get paid by them on a load, you should be keeping copies of the BOL’s, and you can then go back to the shipper that’s paying the freight bill and get paid from them, seeing as you have proof you hauled the load.
     
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  7. highwayMike

    highwayMike Light Load Member

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    Wealth of knowledge
     
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  8. SteveScott

    SteveScott Road Train Member

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    Sounds like great advice. There was no formal agreement before hauling for them. Almost as if they were just doing it to keep their clients happy, but I doubt if they are paying me the entire load amount. I do have the BOL's and while they do show that the loads were booked through them, I am putting my company name as the carrier next to my signature. I also carry more cargo insurance than they do, so I doubt if insurance would be a problem. I don't have a problem with them keeping a fee for themselves because the loads pay so well, but I also don't want them to get into a bind by illegal brokering. These guys are small, as in under 5 trucks. They do have some very lucrative customers though. Just wondering now what kind of formal agreement we could enter into that works for both parties and won't cause either of us any problems.
     
  9. SteveScott

    SteveScott Road Train Member

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    My load cons are a text with the PU number, name and address of the shipper. That's it, no non-conpete, no nothing.
     
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  10. LoJackDatHo

    LoJackDatHo Medium Load Member

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    There’s a couple ways.

    They could get broker authority. Basically same work involved as getting MC authority. Bond should be $5-$7000/ year with good credit

    You can do a trip lease, but you would have to do one for every load because they are supposed to be temporary as in the name “trip lease”.

    You could fully lease on to them, but then you would need to suspend your authority or keep your authority and pay 2 cargo insurance policies, yours and theirs. (Not good financially for you) but may be worth it.

    They could get you in direct with customer, and you pay them a fee for every load, (doubt they go for that)

    As long as you don’t raise a fuss, nobody should get in trouble. They are taking 99% of the risk
     
  11. SteveScott

    SteveScott Road Train Member

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    Right now they're acting more as a dispatcher than a broker. I suppose if they let me get paid directly by their clients and then I paid them a fee for dispatching, that would be more in line with how things normally work and wouldn't get them sideways with the law.
     
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