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Category : Trucking Brokers

Agents Liable for Customer Bad Debt?

Should Agents be 100% liable for their customer’s Bad Debts?

Imagine one of your largest customers going belly up… and they owe you and your Broker company $50,000.00…

You soon learn there is no hope of collecting any of the money owed…

Who should pay for that bad debt?

It should be split the same way your commission was paid out between you and your Broker. If you are on a 50% / 50% split with your Broker, then you should both pay $25,000.00 of the bad debt.  If you are on a 60%/40% split, you would pay $30,000, and the Broker would pay $20,000.

Why?

Its fair. Its ethical. And both parties always have great interest in doing business with customers who will pay you.

I’ve heard of Brokers paying 100% of any bad debts from their Agents… They are CRAZY !

Lets me share a story with you…

I know of a company who practiced the policy of paying 100% of any bad debts from their agents. They did it because they thought it would lure agents into their company, and you what? They were right! They did lure a lot of agents into their company!

A few years down the road, they were hit for a $400,000.00 bad debt from one customer, then another one for 109,000.00, then another one for $55,000.00. The agent (who’s customers they were) didn’t care… he didn’t have to pay any of that $500,000.00+ back. No worries for him…

But there was great pain and anguish for all the other agents, and the broker. The broker was not in position to handle these rapidly mounting bad debts (there were more that rolled in). The broker tried to work things out… but the hole they were in got deeper and deeper too fast.

The broker quit paying the carriers.

The carriers sued all of the customers (and I mean EVERY single customer).

The customers had to pay all the freight bills again. (after already paying the broker months ago).

The customers were very angry.

The customers no longer trusted the agents they had worked with for years.

Good agents and several other good people lost their customer base – and their jobs. They could no longer provide for their families.

Agents now had to start over – their previous customer relationships were ruined because their broker ended up going belly up and not paying the carriers.

The criminal thing behind it all was this: There was a rotten apple agent who PURPOSELY did business with companies he knew were at risk of not paying their freight bills for one reason or another. Because he was paid his commission each week – he knew he would be paid before the bad debts hit the broker.  One bad apple spoiled the bunch… Actually, he put them out of business.

Shippers Can’t Be Too Careful in Qualifying Carriers

This is a True Story.  A carrier calls our office to book a load we had shared with our network.  We start our Carrier Qualification Process and find out that the Carrier wants to use an owner-operator.  We advised the Carrier that we needed to see their federal operating authority, Certificate of Insurance, W-9, and a signed copy of our Broker/Carrier Agreement.  When we receive everything back, we find that the Certificate of Insurance shows CARGO LIABILITY INSURANCE ONLY.

So, we called the Carrier back and asked if they had a separate Certificate of Insurance for Auto Liability.  He said, “No. Our owner operator carries Auto Liability Insurance.  All we provide is Cargo Insurance on the load and trailer.”   When we talked to the Owner-Operator, he forwarded to us a Certificate of Insurance showing Auto Liability Insurance.  At this point, most companies don’t check any further.  But our Carrier Qualification clerk, Kellie, called both of the insurance agents to verify insurance coverage.  This is what she found:

The Owner-Operator only had “Non-Loaded” Auto Liability insurance commonly referred to as “bobtail” insurance.  HE WAS NOT INSURED IF HE WAS HAULING A LOAD!!! The company for whom the Owner-Operator was hauling DID NOT HAVE AUTO LIABILITY INSURANCE.  Therefore, if we would have given this Carrier our load, our Shipper and we would have had a huge public liability risk since nobody was insured to protect the public. Imagine what would have happened if this truck was involved in an accident while hauling a load for one of our shippers.  The injured parties would have sued everybody—including our shipper and us—for damages.  The trucker and the company probably are “judgment proof” as all of their operating assets are most likely heavily financed with little or no equity.  That would leave only Freight Tec and its shipper liable.  As a result, we would have had to pay.  Freight Tec carries Professional Errors and Omissions Liability Insurance (the same insurance as medical doctors, lawyers, CPA’s, and engineers carry) in the event we make a mistake.  Fewer than 50 property brokers out of over 15,000 carry this insurance to protect their shippers.  Freight Tec is one of a select group of brokers who does.

BOTTOM LINE: You cannot be too careful in Qualifying Carriers.  Freight Tec does this every day on a FULL-TIME basis to protect our Shippers and ourselves from potentially devastating lawsuits.  To further protect our Shippers, we also carry Professional Errors and Omissions Liability Insurance.

TED Talk: How to Make Work-Life Balance Work

Nigel Marsh, thinks work-life balance is too important to be left in the hands of your employer.

He lays out his “ideal” day, working, taking time for himself, his wife, his kids, the dog, and friends. Nigel quickly realizes that ideal is just not possible.

He stresses the importance of not falling into the trap of “I’ll do it when I retire.” And reminds us that the little things matter.

He breaks down the problems with how we’re dealing with balancing career and having a full and fulfilling day.

This talk is from TEDxSydney.

 

Highway Bill, and what it means for You

Congress approved the Highway Bill, and President Obama is set to sign it on Friday, July 6, 2012. The report contains the TIA-OOIDA-ATA compromise language almost exactly.

How will this affect you?

Read the great blog post and summary from DAT.com.

Leave a comment below and let us know what you think!

Ban On Cell Phone Use While Driving Hits Commercial Drivers

Well, it’s official.  Effective January 3, 2012, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) and others implemented a rule banning the use of cell phones while driving for all commercial truck drivers.

Violations can be severe – up to $2,750 fine for each offense and possible commercial license suspension for multiple violations.  It’s not just the drivers either – companies that allow their drivers to use cell phones while driving could be hit with fines up to $11,000.

While this restriction will undoubtedly affect many carriers, Freight Tec strongly supports the FMCSA in this decision with the ultimate objective in keeping our public roads safer.

CSA 2010 Opinions – The Good and the Bad

Our position in the industry allows us to hear opinions from highly qualified and reputable people about CSA 2010Both the good and the bad

Here’s a brief list of the top 3 opinions we’re hearing –

First, the Good:

  • CSA 2010 is a much better product today than it was a year ago.  Many modifications have been made after extensive work and feedback from states and carriers testing it out.
  • Every violation in detail is now brought to your attention and scored – unlike the old SAFER system.
  • Seeing deficiencies are shocking at first, but you need to view them as an indicator of the need for changes in behavior – take advantage of the information provided and use it to improve.

Second, the Bad:

  • Even no-fault or non-preventable accidents will get count against your score.
  • Some think severe points should not be accessed to certain aspects that would in no way contribute to the cause of an accident.  As it stands now, you can get written up and have points added to your score because of minor infractions.
  • CSA 2010 is turning out to be CSA 2011 … or some speculate even later before it is fully implemented.  Many people (on a state level) need to be trained – Highway Patrol, Inspectors, local FMCSA personnel, etc.  This may end up as the new “CSA” system and drop the 2010 reference altogether.

We welcome your thoughts and opinions as well –
What have you heard or what do you know about CSA 2010?

Leave us a comment and let us know!

Brokers, Acid Reflux, and Nylon Stockings

Jobs with High Stress can easily help create Acid Reflux Disease.  Clearly, Brokers are in a high stress career and are just as prone to Acid Reflux issues as anybody.  If you don’t have Acid Reflux problems yet, chances are that you will sometime in the future. 

What is Acid Reflux Disease?  This is the painful condition where your stomach builds up excess stomach acid and it attacks your esophagus where it enters into your stomach and other areas.  It can be severe enough pain that most hospital Emergency Rooms will run an EKG to make sure your not having a heart attack.  Although there are some good medications that can help deal with Acid Reflux such as Nexium, Prilosec, and a host of others, many times Acid Reflux can be controlled by diet.  In fact, to avoid side effects from taking medications to reduce the pain, it makes sense to determine what in your diet is causing Acid Reflux.

Since this is such a common ailment, both doctors I have visited over the years automatically pass out a pre-printed sheet of paper with a list of common foods NOT TO EAT to avoid these problems.  The list includes:

            Carbonated beverages such as Coke, Pepsi, Mountain Dew, energy drinks, and others.  Carbonation causes your stomach to produce excess acid.  But to complicate the problem, these beverages also contain caffeine which also stimulate acid production.  To make matters worse, if you drink diet sodas, the artificial sweeteners can also cause excess stomach acid production.  Sometimes, these problems can be handled just be taking a couple of TUMS tablets.  But as the disease progresses, TUMS will no longer work.

            Beer & Alcoholic beverages can cause bloating and slow digestion.  The stomach reacts by creating more stomach acid and so more acid reflux issues result.

            Chocolate is a big acid stimulator as are citrus fruits like oranges (including orange juice) and lemons (including lemonade).  Where possible, eliminate chocolate and O.J. 

            Hot drinks such as Coffee, Tea, and Hot Chocolate all attack the stomach lining and may contain such things as caffeine and chocolate which stimulate acid production.  So the “hot” plus the substances of caffeine and chocolate can hit your stomach with a “double whammy”.

            Sugarless chewing gum is also a problem in that the sugar substitute creates excess stomach acid and when you swallow, you also swallow excess air that causes your stomach to bloat which also creates additional stomach acid.  Since many gum flavors are peppermint, spearmint, etc., these flavors also can create stomach issues.

            Avoid peppers of all varieties, tomatoes, and onions.  Avoid salsa, hot chile, hot soups, and large quantities of ketchup!  Anything that puts acid into your stomach is not your friend when you have acid reflux.  You want to reduce acid, not ingest more.

            Finally, avoid greasy foods as they cause excess stomach acid to build up.  Eat lean meats.  Avoid peanut butter and excess mounts of butter as they require more acid to digest.

BIG QUESTION:   What can I drink and eat?  You can avoid a lot of problems by just drinking water for your primary beverage.  Low-Fat milk is fine for cereal.  Substitute peaches, pears, and apples for oranges.  Although these fruits have some acid it is much less than Oranges or Orange Juice.  Eat vanilla ice cream instead of chocolate ice cream.  Use common sense.

IS THERE HOPE THAT I CAN EAT OR DRINK SOME OF THESE ITEMS ON THE LIST?  Yes!  If you can go “cold turkey” and eliminate your acid reflux than you can consider adding a small amount of one “bad item” in your diet to see if you can tolerate it.  Only add one at a time and if it is food, be sure to eat something else with it to dilute it in your stomach.  Sometimes, you can tolerate a food on the list if you eat it sparingly and avoid Acid Reflux.  If by chance you do get Acid Reflux after eating that one food, then you know that you need to eliminate it from your diet.  Period.

One other big problem concerns certain pain killers such as ibuprofen, Aleve (for arthritis pain), and aspirin.  If you need to take these pain killers, always take them with food and always take the minimum amount your pain will tolerate.  Each of these pain killers is tough on your stomach lining.  Modern medicine has recently come out with some hybrid “dual medications” that combine the pain killer ibuprofen with the compound found in Nexium that decreases stomach acid so that people can control their pain and also get the benefits of ibuprofens anti-inflammatory properties.

What do nylon stockings have to do with Acid Reflux?

One medical doctor told me that we should compare our stomach that is under attack from acid-stimulating foods and pain killers to a pair of nylon stockings.  If the nylons get a hole in them, the hole will gradually expand.  The same thing happens to the damage done to the inside of our stomachs when they start creating too much acid.  The stomach lining can heal to some extent, but the damage is done and it is important to take care of what we have left with a little common sense.

The whole purpose of this article is to help Brokers and others in this industry with high stress jobs to be able to work pain free from Acid Reflux.  This is in no way a substitute for visiting a doctor or medical professional who is familiar with the medical issues you face.  We are not medical professionals.  See a doctor when you need to.

Retirement Strategy for Freight Brokers

Freight Tec is proud to announce our Retirement Strategy for Freight Brokers.

“How do you get the most money out of your freight brokerage when you decide to Retire?  At some point, you will want to retire or leave the business to pursue other opportunities.  How will you do this successfully?  This short article will give you some ideas of what you need to do to maximize your profit when you sell your business.”

We are offering this FREE REPORT on “Six Common Retirement Mistakes That Will Ruin Your Retirement, and How to Avoid Them ALL!”.

The key is to sell to the person or entity that will take care of the business, keep your customers happy, and continue to provide an income stream to you.

Freight Tec can help you design a Retirement Plan that is personalized for your individual needs.   We can move quickly to help you Retire Now.

Check out our FREE REPORT and Contact Us for more information, and let us help you start planning your Retirement TODAY!

Interesting Times for Transportation

Transportation systems are very dynamic.  During the last few years the railroads have become more competitive with rapid service from Chicago to Los Angeles in order to out-compete trucking companies.  With this kind of service available, the large trucking companies have put more and more of their freight on the railroads double-stack container trains.  Truckers are countering this competition with requests to be able to run heavier trucks on the Nations highways with weights up to 97,000# as opposed to the current 80,000# limits on most roads.  This would drop the cost of transportation per ton for the shipper.

But as the railroads have gained market share, they now face an interesting test:  The peak Christmas shipping season is upon us but so is the need to absorb a huge fall harvest of corn and soybeans that must be moved to market.  Will the railroads be able to handle both peak seasons at the same time with their available capacity of equipment and people?  Time will tell but the railroads claim they will be able to handle the heavy volumes of freight.

Union Pacific Railroad, Burlington Northern Railroad, Norfolk Southern Railroad, and CSX Transportation are all bringing on furloughed people who had been laid off during the recession.  Union Pacific is bringing on 900 locomotives and a vast supply of hopper cars and containers to meet the demand.  The locomotives had previously been in idle storage during the recent recession.  Other railroads are doing much the same including bringing on line much new equipment that they were anticipating they would need.  In addition, railroads are hiring new people and matching them with experienced people and moving them to specific areas around the country to deal with the logistics of moving long trains on a timely basis.  So, hopefully, the Nations railroads are up to the task of meeting the demands of two peak seasons.

Meanwhile, the trucking industry has taken its hits from the Recession and many small carriers are now out of business creating a capacity shortage in some areas.  Adding to their troubles are the new CSA 2010 regulations coming into effect on Nov. 1, 2010 that will target driver safety issues as never before.  CSA 2010 will help to eliminate the unsafe drivers over a few months.  The Winter months are normally slower for trucks and the loss of 3% to 5% of the nations truck drivers may not show up until Spring when freight demand picks up.  But by then, trucking rates will increase due to the capacity shortage that will ensue due to a shortage of qualified drivers.

How does this all affect the shipper?  Generally speaking, from a cost point of view, railroad container freight is less expensive for lanes exceeding 1300 miles between cities where both the pickup and the delivery from the rail terminal is within the Commercial Zone.  Trucks are typically more cost efficient when the mileage between two cities is less than 1300 miles or where multiple stops are required along the route.  Trucks have the advantage of being able to drive directly from the shippers dock to the receivers dock.

Property brokers are finding they must also be more creative to provide the best value to the customer.  Larger Brokers move freight both on trucks and container railroads to meet their customers needs.  The brokerage business is unique in that the largest broker in the U.S. only has 5% of the market share.  According to the U.S.D.O.T., there are over 21,000 property brokers registered with the Federal Motor Carrier Safety Administration.  Brokers continue to grow as they provide the best value for their customers.

Another facet of the transportation industry are the freight forwarders—specifically those that are international in scope.  Several years ago it was predicted that the large multi-national freight forwarders would gain more and more market share.  Even though these large companies have grown, so has the market share.  But the gains in market share have been by smaller freight forwarders who provide incredible service to their shippers.  Why?  Shouldn’t the bigger multi-national forwarder be able to drive costs lower for shippers?  Yes, they do.  But many shippers would rather be Number One with the forwarder they use knowing that that forwarder will do everything possible to get their shipments to their customers on time as opposed to being customer Number 273 with a large multi-national forwarder.  The price is slightly more expensive with the smaller company, but the service is great and the shipper doesn’t need to worry about what would happen if the big multi-national has a conflict with the service needs of multiple shippers and the resulting costs and problems that would create with missed deliveries.

Transportation world-wide continues to be dynamic, competitive, and both service and cost oriented.  Different modes of transportation compete with one another to present a better value proposition to the shipper.  This is good!  Despite the rough economy during the past few years, business is picking up!  Shippers have more options than ever.