Motor Carrier Insurance & More Q&A | Final Mile 129

SPEAKER_01: 0:19

Welcome back for another edition of the final mile. It's our listener QA session here. All these questions came from our audience. So make sure to check out all the other content at freight360.net. Or if you're on YouTube, just go to our channel. We got all kinds of good long form, shorter educational videos. The clips are reels, short stuff. And the Freight Broker Basics course is at the website as well if you're looking for an educational option. All right, Ben, our first question today is as a shipper, can I use a load board to find trucks? So the actual full question was that this uh the the person said, Hey, we have some of our own trucks. We're a manufacturer, but when we need additional capacity, can we just get on a load board ourselves and find trucks that way? And the I'll give you like the short answer and then kind of a longer answer. But the short answer is yes, you can go like right to DAT and get a shipper account. It's gonna be slightly different than what a broker's login is gonna look like, but you're accessing the same capacity that a broker would, um, which is just gonna be your carriers that are posting truck trucks, etc. Now, what I will add to that is the um there's there may be a time and a place when that's the best option for you. Um, just the same way that there's a time and a place that a having a uh a you know network of brokers that have specialty in certain equipment types or regions and capacity that they've built up could be better. Because if you're going to a load board at you know, as your only method of finding capacity, you're starting off with a baseline of uh zero level of trust, right? And when you can establish a relationship with a freight broker, that's where you're gonna have um, you know, someone that has their own developed carrier base, ideally, depending on, you know, the the broker. But um, they've got you know develop relationships with motor carriers, um, they know who wants to backhaul on what days of the week to where. Um, they know how to vet these guys accurately as well. So one of the big things, and I I had a meeting with TIE TIA yesterday about this, um, was the lack of education on the shipper side when it comes to the fraud that's out there, right? When a load gets stolen or double brokered, the the shipper just starts yelling at the broker like it's their fault, right? Um, and a lot of times, you know, it is primarily a lack of of some sort of um procedure on the broker's part, but um, there's a big push to have brokers and shippers work together um to to best protect against the bad actors that are out there. So, yes, you can go find your own trucks. Um, there's the time and a place for that, but I would caution you on don't forget what the value that the a good broker brings to you is. Any other thoughts on that?

SPEAKER_00: 3:15

A couple. I mean, we've both worked and consulted with shippers that have started their own brokerage, um, grown their assets, like literally worked from their point of view with them. We have a really large one I've been working with for a few years on this. Like, the first thing I want to point out is like there is a significant difference between a very skilled, experienced broker and a new broker, right? Enormous and their ability to source fast, safe, right? And the right ones that you should have for the right lanes when you need them, right? As opposed to somebody just posting loads and getting a truck. So that's even within like a very good broker and somebody maybe average or new to the industry. Now, the thing that I would say is like the biggest difference is like when I've seen shippers start a brokerage and staff their brokerage with the folks that tendered loads from the shipper point of view, there's a very big difference in how those two jobs are done. They both seem the same. You're sending loads to carriers, right? And you're negotiating rates. But shippers that I've worked with and even trained their staff on the brokerage role, like it takes a significant amount of time for them to realize like they're very different jobs. You have very different risk and you have a very different amount of time and staffing need. All of those things are very different than sending loads out as a shipper versus brokerage, right? Which is why brokerages can add a lot of value to their customers, right? And then like the last one, which I think is probably one of the bigger variables in this, is it's vetting, verifying, and preventing fraud, right? Because most of the tools that brokers use aren't all available to a shipper, first off, like you can't even buy some of them, right? And secondly, like you really need to learn how to do this in a very different environment, right? Shippers are trained that, like, hey, I got a new carrier, they gave me some good rates, send me your information. I send it over to my compliance team, I send it to my manager, they review it, and in a week or two or a month, we then onboard this carrier after doing all of our due diligence, then verify all this, then we start working with them. We do that in three minutes, a minute and a half sometimes, right? Like maybe two minutes, maybe five minutes. Like, so the expectation and the time at which you're going to need to do this are drastically different. And that's where most of the vulnerability and risk is to theft, because criminals and people that are stealing freight know that somebody new to this or inexperienced is not likely to go through the same thing somebody like you or I would at our companies in regards to verifying, vetting, both the human operations and things you do as a person, as well as the technology that accompanies those things, they are worlds apart, right? And to be honest, most shippers don't save what they think they are going to save. They end up with more losses, more claims, and spend more money.

SPEAKER_01: 6:08

I was gonna say one of the things that um is a great discussion point to have with a customer, even if it's just a prospect, is to talk through. You could ask the questions about like uh one of the guys on my team, like one of his main questions is like, have you guys been double brokered lately? Or have you guys had a load stone lately? Like he gets right into the fraud side, and you can talk about, you know, and if they have, they're gonna probably tell you a story, right? Um, but that's where you can talk about the things that you've got, the the tools that you have access to with your brokerage and the processes that you personally use to help protect their freight. So very good, very good point there. So I know it's a shipper asking the question, but it's a big takeaway for a broker for you know the shipper's perspective to understand it.

SPEAKER_00: 6:52

Yeah, like I have a client right now that is both. Like they're a shipper, they opened a brokerage, right? They also have a trucking company. And like when they go through it and they're learning how to do things in the different type of business, like they're doing very well. In fact, they're doing like way better than most clients I've worked with in the past couple of years. So like it's doable and you can do it well. But I just want to point out like they're very different jobs with very different tools and very different expectations and very different risk. Exactly.

SPEAKER_01: 7:20

All right, our next question insurance. What is any autos versus scheduled autos on a certificate of insurance? Um, so any autos is the broad, and so again, if you're looking at a certificate of insurance, that a cord form or COI, whatever you want to call it, um, that is the there's gonna be a checkbox under the the policy type on the form. And any autos is the first one that's that's usually available on there. So any autos has the broadest form of coverage. That's gonna cover um essentially any truck that's operating uh on behalf of that company. Um because it's the broadest and it's gonna have the broadest level of uh risk, it's gonna typically be a pricier option. Okay. Scheduled autos is only going to limit the coverage to the equipment that is actually scheduled or listed on that certificate. So you're typically gonna see year make model VI number for all of the power units that are on there. So like I had actually had a guy this morning ask me, he's like, you know, he's like, I this this carrier wants to book a load, but I don't see their VIN number, you know, he is asking for a VIN number, and he's like, I don't see the VIN number on the on the policy. It's because it was in any in any auto's policy. So any question thoughts on that one?

SPEAKER_00: 8:41

Yeah, I can't remember this for sure. It's in my notes, but does any of any auto also cover leased on and rented? So you need both those boxes.

SPEAKER_01: 8:57

It's like it's it covers little it'll cover an employee's vehicle if they're using it, like to deliver pizzas, for example.

SPEAKER_00: 9:03

Okay.

SPEAKER_01: 9:04

So yeah, because it is the broadest form that's out there.

SPEAKER_00: 9:08

Again, and so and I wanted to reiterate that to other folks is like, okay, if it's scheduled auto, it's the ones listed. But they might also have a box checked for leased on or rented, right? Because it's the ones listed, but if they have a lease on driver, they might have that box checked for leased on. I don't necessarily think the VIN has to be on there, but if they have a lease agreement, they would technically be insured, correct?

SPEAKER_01: 9:32

Um, I to my understanding, under any auto, yes.

SPEAKER_00: 9:36

So but I mean I'm under scheduled auto.

SPEAKER_01: 9:39

Say that again.

SPEAKER_00: 9:41

If I have scheduled auto and I have two trucks, okay. Now I have another driver, he's leased on, and I have the box checked for leased, right? Or hired is actually what it is. Yeah. So you can have scheduled and hired, and your leased on drivers would be covered by this by the hired box, not the scheduled box.

SPEAKER_01: 10:01

It it's either hired it's or it's there's a non-owned one as well. Um for like leased. One of the two, this is where an insurance agent is going to be very helpful. But the the key is if they're leased on, your standard scheduled autos policy will not cover them if their VIN number's not scheduled on the policy, which a lot of them aren't. And they're all they'll always say, like, oh, he's leased on, he's got his own insurance. Well, if that's the case, you need to have a certificate of insurance of from him, his insurance company, that lists them as additional insured, whoever he's leased on to. And very often they don't have that. So good question. Um, our last question is where's my nose here? Can a customer file a claim two weeks after a load is delivered? Yes. Um I'll give you a caveat though, right? If a we actually had an instance of this a couple months ago that we're dealing with. Um, BOL is clean, meaning like the log gets delivered, there's no damage annotated. I think it was steel coil, and as they unwrapped it, they found rust or some sort of damage because of the tarping wasn't done properly or something like that. Um I believe under CarMac, you there's a nine-month period of time for a claim to be filed. Um, I will tell you, the longer it gets from that point of delivery, very likely that you're gonna have less documentation readily available to s substantiate a claim. So I just set the expectation that um with a with a customer and the receiver is like, you know, thoroughly inspect the um, you know, the the product as it, you know, as it appears when you unload it before you sign anything. And then if you're you know, in the unpackaging portion, if you then identify something, let's say five days later, right? Yeah, let them know immediately, get pictures and all that stuff. Because if you don't have your ducks in a row for evidence when you when a claim gets filed on your behalf, um your odds of the carrier's insurance denying it are gonna go up, right? They could say that, oh well, you know, you guys had it for two months and then and then you broke it, and now you're gonna file a claim on us that we're gonna deny it, right? Like, so that's where you know, unpackage and inspect as soon as you can, because the longer it gets an adjuster's gonna likely have a lesser chance of uh of approving it. So I don't know that I've ever had one like more than like five or six days after delivery. I know the nine-month one was uh um CarMac amendment, like actually states a nine-month mark in there. Um that's the there there's a one of the like national organizations has like a I think it's like a five day is like their their benchmark of guidance on it, but um would you say you looked it up?

SPEAKER_00: 12:56

Yeah, CarMac is nine months, but here's the caveat, right? And it says like this is GPT, so like still verify this, but it says, you know, damage does not have to be noted at delivery to preserve a claim. But nuance, concealed damage is claimable as long as it's cleaned within nine months, and you can show the damage occurred while the freight was in the carrier's custody, and that's probably the area that insurance companies really lean on to go, how do you know it didn't happen in the warehouse? How do you know it happened in the truck? You didn't sign this when you were seen.

SPEAKER_01: 13:34

They were able to get like evidence that it was not tar properly, and um it's still a disaster, but there that's that's where they're gonna be able to get away from it. And this is where like I usually recommend this, like getting pictures at uh and like advise a driver, like getting pictures of the freight loaded and at unloading is going to help them if they're worried that a customer is gonna try and claim something, right? Or noting that like shipper was not or driver was not allowed to be present at loading. So like we've we've heard the produce horror stories where like you know, they they don't properly um you know, they don't they don't let the the produce be in the right condition or temperature before it gets loaded, they just rush it off the the off the field and onto a truck, and next thing you know, like it's gonna get there's gonna be some spoilage there. So um documentation is gonna protect every single party involved. So like customer having cameras at their facility is gonna help protect them from a carrier that does something wrong. Um, a driver that gets photos is gonna help protect against a dishonest uh shipper or receiver. And as the broker that's gonna facilitate the claim for both parties, you know, recommending that on both ends is gonna be is gonna be key.

unknown: 14:53

Yeah.

SPEAKER_00: 14:54

If I'm a carrier, I'm pulping all the product, verifying that before I load and unload all the time, right? Second, if at all possible, taking pictures loaded and at delivery to verify what was done at loading or unloading to just protect myself. The other thing that's just worth throwing out there is a pretty common thing in produce is receiving under protest, or they'll look at the cargo and be like, we think some of it's damaged. We don't know. So we're gonna take this under protest, which I think gives them like three days, maybe like two or three days to go through.

SPEAKER_01: 15:25

We can call for a USD function at that point. Correct. Yep.

SPEAKER_00: 15:29

Yeah.

SPEAKER_01: 15:29

All right, good questions. Keep them coming our way. Final thoughts. Whether you believe you can or believe you can't, you're right. And until next time, go bells.