Carrier selection and vetting is one of the most important factors of running a successful 3PL or freight brokerage. Here's our favorite tips and tricks from world-renowned experts in freight.
As a freight broker or 3PL, in particular a non-asset based LSP, you'll likely be working with a network of motor carriers, specifically freight carriers, to move loads on your behalf. This is a company that moves freight through a variety of transportation methods - from air cargo to over-the-road. Each specific type of freight carrier will need their own specific expertise, equipment, insurance and licensing to allow them to move your and your customers goods safely and effectively.
The services of these freight carriers can also vary - from local in-city deliveries to much larger domestic over-the-road shipping or even international ocean shipping. The specific freight carrier you decide to work with can make a huge impact to the final quality of service you are able to deliver to your customers, as well as the costs to your business.
This searching process is often conducted by freight brokers and 3PLs on tools like load boards, through social media tools like Facebook groups, through email lists and phone calls, as well as a host of other ways ranging from phone book dialing to google searches. After finding a list of carriers that you'd like to work with based on their services, equipment, and availability, you'll want to vet them.
This is what this article will focus on - the process of freight carrier vetting, and the specific tips and tricks that proven freight brokers have used to make the process faster, more efficient, and more extensive.
As a general guide, successful freight brokers use a variety of processes and tools to choose and vet their freight carriers - often using a combination to get the best, most reliable results. These processes are generally designed to assess the trustworthiness and roadworthiness fo freight carriers before they are formally signed for a shipment.
Most freight brokers will run a carrier's information through a variety of online carrier databases, such as DAT, ITS, the FMCSA safety rating, the CSA history, insurance documentation and internal carrier databases. These different databases are incredible sources of information that provide vetting power for freight brokers and 3PLs to research and vet carriers before putting them on their shipments.
On top of going through databases to do a simple information comparison to weed out the most obvious carrier outsiders, most freight brokers will also conduct additional processes and implement strategies to ensure their freight carriers are doing their best to mitigate transportation risk. One of these strategies is to get a comprehensive idea of a freight carrier's hauling and trip history before they're even contacted for a potential load. This can be found through online databases, like the FMCSA SAFER database.
An experienced freight brokerage accounts manager at FactorForce and the founder of carrier onboarding software HelloCargo, James knows a thing or two about vetting and bringing in new carriers safely and effectively.
"Keep detailed notes in your TMS about bad interactions with past carriers and shut them off as needed. But also make note of good carriers and try to use them as much as possible."
Along with using a carrier vetting service like carrier411, and collecting up-to-date insurance on carriers, James recommends that freight brokers check up on freight carrier safety scores - including drug use, vehicle maintenance, hours of service (HoS) violations plus much more - and looking for carrier411 reports mentioning poor experiences or bad situations from other freight brokers.
James also recommends that freight brokers establish a strategy and policy for brand new carriers. He noted that his own threshold is ~9 months, but the situation can differ for each freight broker and freight carrier based on your companies risk tolerance, the value of freight, and mode of transportation.
Finally, James recommends freight brokers keep detailed notes in their TMS about bad interactions with carriers, shutting them off as needed - but also collecting notes for excellent performers and pinning them so that they can be used as much as possible. Using FreightPath? Learn how to do this in this article: Using FreightPath For Carrier Compliance And Carrier Vetting.
Anthony Natale has an extensive background in sales, management and freight - with extensive experience as a freight broker at Mosaic Logistics, along with sales leadership at Rose Rocket and FreightPath. He's also an experienced consultant and the founder/CEO of Freight Genie - a service that aims to help freight brokers start and grow their businesses effectively.
"It's essential that freight brokers invest into quality carrier compliance software (e.g. carrier411) and TMS software to keep detailed internal notes on performance."
He's long preached the value of effective carrier vetting as a strategy to improve freight brokerage performance, legitimacy and quality of service. Along with the strategies already discussed, he's keen on the value of using reference to determine the validity of a carrier's safety and performance record. He personally requests 3 broker or customer references to confirm their service history, although he does point out that this may be trimmed or increased based on your own specific company's needs.
It's also essential that freight brokers invest into quality carrier compliance software (e.g. carrier411) and TMS software to keep detailed internal notes on performance. This allows you to make informed decisions using a mix of external and internal data sources.
Finally, he stressed the importance of making sure all carrier documents are up-to-date - no expired or uncovered insurance, a clean safety record and no history of claims against them. These documents should be stored in a centralized platform that all employees of a brokerage can access if needed, says Anthony - it's critical that sales and dispatch can easily access carrier compliance records if they need to find alternate carriers, quickly quote a load, or for any other reason.
You can do this in FreightPath by following the tips and tricks in this article: Using FreightPath For Carrier Compliance And Carrier Vetting
Will freight carrier vetting prevent all issues forever? Nope.
It'll always be an imperfect system, and there will inevitably be freight carriers who make it through your vetting process who provide less-than-desired service, safety, or performance. But with the right system, you can make this the exception - not the rule.
Remember - your customers will be asking you: are you doing everything you can to make sure my freight will arrive safely on time and intact?