Insider Secrets to Successful Freight Brokering

Look for changes on October, 23 .....

On October 23 of this year, the FMCSA will be doing away with MC numbers for freight brokers and going to US DOT numbers. There are a lot of questions involved in this new direction so stay tuned for more info in this regard.

My big question right now is, "Is this new requirement well-thought-out or is it going to have unintended consequences like so many other government matters?

Stay tuned, Okay?

"More CSA Flaws"

Here is a quote from Landline magazine, May 2014:

"An audit by the U.S. DOT Inspector General has found more than a few flaws in the [FMCSA's] CSA program that tries to rate the safety of trucking companies. For example, the [IG] says 13 percent of the companies in the FMCSA database report that, actually, they don't own or operate any trucks.

The audit states that's a serious flaw because carriers are compared to each other, which affects everyone's score. The audit also said that when it has pointed out flaws in the CSA program before, the FMCSA took only "limited action" to fix the problems".

The FMCSA has backed off to some extend by saying that shippers and brokers need not rely solely on Basic scores in making carrier selection. But the FMCSA will not acknowledge that there are flaws in the SMS methodology.

The turmoil CSA is causing .....

CSA was meant to identify unsafe carriers and place them in order for possible safety interventions in the future. Initially, the FMCSA encouraged third parties like freight brokers to use CSA and its methodology as tools to make decisions on carrier safety and selection.

The essential problem is that the SMS methodology has been founded to be flawed. The FMCSA won't admit to this but they did back off on their postion that third parties need not rely upon their data for making carrier selection.

The entire mess and confusion are covered in detaill in our freight broker training. We look at actual carriers to learn what information is there and how you might want to react to all of this.

To learn more about some of these current issues that freight brokers face, go here: http://atexfreightbrokertraining.com/CurrentIssues.html

October 1st Government Shutdown?

Here is a message from the AIPBA: 

As many of you know, there is reason to believe that there will be a government shut down next Tuesday when the government runs out of money, unless Congress acts responsibly. This could have an impact on the broker bond issue and our application for an injunction. Once scenario is that FMCSA will not be able to report to work to implement their "guidance" notice.

In the event there is a shutdown, we also expect the US Attorney will file a stay on all pending cases, including ours, which would cause delays. We are working with our legal team to monitor this situation and try to navigate these turbulent waters...

In the meantime, please keep in mind that even if an injunction is not issued on or before Oct 1st, enforcement on currently licensed brokers will not happen through November so we still have some time to effect an injunction during October to stop eventual $75k bond enforcement.

If your bond has been cancelled we highly recommend you get at least an immediate $10,000 bond replacement on file before Sept. 30th.

Here's more on the possible government shut down:

http://www.cnn.com/2013/09/23/politics/government-shutdown-daily-life/

10 ways a government shutdown would affect your daily life cnn.com

10 ways a government shutdown would affect your daily life.

How the FMSCA is Affecting Freight Brokers

Since the implementation of CSA 2010, the FMCSA has created a lot of confusion. Their goal of making the highways a safer place for the public is a worthy goal. But in the process, they are prematurely making decisions that are making it difficult for brokers and shippers to operate.

The FMCSA methodology in their Safety Measurement System (SMS) has been challenged to the point where the FMCSA has stated that it is not prepared to submit the methodology for rulemaking. Some opponents have concluded that the methodology is not accurate and may be misleading.

In addition, some conclude that the SMS system is biased against small Owner Operators and therefore favoring the larger 500-unit fleets. The FMCSA denies this.

Several transportation authorities are conducting investigations into the SMS methodology. Several outside educational institutions have conducted their own studies and have concluded that the new methodology and other aspects of CSA2010 are contrary to statements made by the FMCSA.

This is an important evolving issue and brokers will ignore this at their own risk.

CSA2010 and Big Changes

The FMCSA has implemented new trucking regulations prematurely. Unfortunately, it is causing a lot of confusion.

Specifically, the method of collecting and reporting motor carrier and driver inspections and evaluations is flawed as more opponents are realizing.

Here is how the FMCSA has explained it:

"FMCSA designed the SMS expecting that changes would be made as new data, and additional analysis became available. This [update] is the first in a series of expected imporivements to the SMS that will take place periodically."

While the goal of making our highways safer is a worthy effort, the shipper/broker community is in dire need of clarification, especially regarding the requirements for selecting a safe carrier versus one that is not safe.

Freight Brokers' Responsibility Checking Motor Carriers

The new CSA2010 regulations directed at the trucking industry have been the source of a lot of confusion. Especially in regard to what liability does the broker face when checking out their carriers. This is important.

Afterall, several large brokerages have been charged millions with the highest infraction at 23 million dollars. These brokers were found to be negligent in their truck hiring practices.

The CSA2010 regulations are still in the process of being explained to the entire industry. The most important statement and probably the most recent is where the FMCSA states,

"Readers should not draw conclusions about a carrier’s overall safety condition                 simply based on the data displayed in this system.  Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49           CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways".

This clarifies some of the confusion for now. It may be some time before a total and complete explanation is set forth where freight brokers can learn exactly what their liability is when checking out carriers.

Those who take my comprehensive freight broker training can learn about such activities and more. Check out the website at: www.atexfreightbrokertraining.com

Have a safe week.

The UCR Is Now Ready for 2010!

After lying dormant, apparently, for months, the UCR is ready to go. The FMCSA has set the fees at $76.00 while the UCR Board was proposing a slightly higher rate.

The UCR is the Uniform Carrier Registration that all freight brokers are required to obtain - even if their particular state does not participate. The fee structure is an upward sliding scale of fees and is based upon the number of trucks a motor carrier has.

Guess what? Most freight brokers don't own trucks. So, they pay the nominal $76.00 fee. I THINK I understand why this fee is being assessed against freight brokers, but I'm not sure. In my training, I usually mention the fact that the UCR previously applied to motor carriers only and there were some changes made which resulted in states receiving less money on the UCR.

Hence, the fee against freight brokers is just a method to help cover this shortfall that is hitting the states. So, freight brokers have until July 15 before enforcement goes into effect for 2010.

Caution: you will want to go directly to the government website to register this. Third party vendors are making it very expensive if you go through them.