What are the risks for brokers dealing with new driver authority?

So I’ll say from a brokers perspective using someone with a new authority is somewhat intuitive. It has been said before you generally know who you are dealing with within the first 30 seconds of a phone call whether or not the person on the other end of the line is trustworthy and competent. That could go for anyone though no matter how old the authority.

A new authority doesn’t always mean a green carrier that doesn’t know what they are doing, could be a company driver or o/o of many years or a new company with a solid foundation. Even still if I Take a call from someone that sounds a little wet behind the ears, if they ask the right questions, seem knowledgeable, and their insurance checks out, I’ll probably give them a chance to prove me wrong. Most of my freight isn’t super time sensitive or of high value so I suppose that plays a part in my willingness to give people a try.

However I will say if I have a hot load and I see a truck with a newer authority posted that is not setup with my company, I’m probably not calling out to them, simply from a time savings perspective of negotiating a price, getting the rate approved, then getting them setup. However if they call me on a load like that, it will be a judgement call at that time to see if they are worth the risk and the time it takes to get them on board.

As far as how long a carriers authority must be active to ease concerns, I can’t really say there is a time frame that applies for me. To me it’s about the person on the other end of the line, does it sound like it’s someone I’m willing to risk my reputation on with my customer on the load in question? If so then I’ll probably be willing to work with them.

 

Amount of insurance on a new authority doesn’t really play a factor for me, just get the standard limits 1 Mil General liability & auto Liability and $100,000 Cargo should get you plenty far, unless your are looking at hauling something specialized or requiring you to carry more than $100k routinely. As far as workman’s comp, if you are required to carry it, just go with the standard limits or whatever you agent suggests.

Might suggest going with an agency that will allow you to easily increase your cargo insurance for single trips of higher cargo insurance if need be. Also make sure get your insurance through a company with a decent AmBest rating (B+ or higher). Not only will that ensure your claims will get paid but there are firms out there that will not work with you with a lower rated company or if you have one that is “Non-rated”.

 

Most of the problems I've had in this business were with new carriers. This is mostly because they haven't figured out how to run a trucking company yet and are still making tons of major mistakes that they will ultimately fix or go out of business... The rest of the reason for problems is desperation because they are under-capitalized.

Like NHS I will still work with newer carriers that I get a good feeling from on the phone... Particularly if the load is low stakes for the customer.

 

OK I see that it isn't the insurance, which is an excuse i heard from many brokers, but rather a problem with relationship building and possible damage of a reputation.

So the problem I see with many new authorities as NHS mentioned is they do not know how to run their business but then it brings up the question from my side of the fence (which is sort of answered by Bored), would means testing of a new authority and maintaining minimal capital to function as a business put the new authorities on a different level and ease the problem working with a new authority?

IN addition to this, should there be on both sides of the fence having an authority having to also prove there is a business structure that allows it to function properly?

 

Yes absolutely. I'm always happy to work with anyone properly capitalized who can run a trucking company. I can usually tell almost immediately if the person I'm dealing with is green or an old hand. The big question I always have about the old hands is why do they have a new MC number? There are lots of good reasons, but there are also a ton of bad reasons. It's pretty routine for me to ask where they were before and why they are on a new MC number. If they sound sketchy about it I usually do some digging or just pass immediately if the load is going to be easy to cover.

The sad truth is that if a load is easy to cover I'm not likely to be willing to do any work at all on things like really carefully checking someone. The easy to cover loads are the good loads from the truck perspective lol.