Why Carrier Vetting Is Important and 5 Resources To Ensure Reliability

Why should carrier vetting matter to you as a shipper? Simply put, your freight is always at risk while in transit, no matter who’s moving it. What you need to make sure of is this: has your carrier or broker done all they can to ensure your freight is in the best position to arrive on time and intact? As capacity tightens in the industry, some carriers will be tempted to cut corners or operate below advisable standards in order to satisfy demand. This is a dangerous situation and one that a robust vetting process can help to avoid. Bottom-line, your carriers should care about your cargo just as much as you and be effectively equipped to haul it. Here are five carrier vetting factors your broker should be looking at to pick the best carriers from the rest.

#1: FMCSA SAFER Rating

The FMCSA SAFER (Safety and Fitness Electronic Records) database is the starting point for finding valuable safety-related information for any registered motor carrier. And the best part, it’s free to access. The SAFER system provides a concise record of a company’s inspection history, out-of-service history, and crash data. It’s a great tool for verifying company information and most importantly identifying the motor carrier’s safety rating. Ideal safety ratings are listed on the site as “Satisfactory” and often times a “Conditional” rating will show some safety issues.

#2: Financial Stability

Financial stability means reliability and a better guarantee the carrier will be a good partner for the long-term. If the carrier were to close its doors tomorrow would your freight be held hostage? Just look at last year’s Hanjin bankruptcy as exhibit A of this scenario. At the time Hanjin filed for bankruptcy, 85 of its 97 ships were literally stranded at sea as ports refused to admit them (for fear the dock workers wouldn’t be paid). After many extra days on the water, it took a boost of private funding to help resolve this disruption and get the boats docked and their cargo finally delivered to their rightful owners.

Checking a carrier’s financial history is also a good way to flush out chameleon carriers. Chameleon (or zombie) carriers is a term given to a carrier that closes down and reopens as a new, legally separate entity as a way to avoid consequences of safety violations. These carriers are dangerous because of their unsafe practices and reluctance to change.

#3: Insurance Coverage

Shippers often never think or worry about cargo insurance until an accident or claim occurs. It’s important that your broker not only checks its carriers for insurance but also verifies that the insurance carried is appropriate for the vehicle and business being conducted. Making sure the VIN number matches the insurance carried is another important verification.

4: Equipment Age & Condition

Now more than ever carriers must have effective procedures for the maintenance and retirement of equipment. In an industry where costs are rising, capacity is restricted and prices are not keeping pace, many carriers are making up the difference by extending the life of their equipment beyond the point of usefulness. Also, newer equipment means fewer repairs and less risk of your carrier breaking down and stranding your freight on the side of the road.

#5: Driver Management

It can be easy to forget that your supply chain is held together and driven by drivers who operate with no direct supervision while on the road and who earn on average around $55,000/year. Given that, it is critical that your carrier have a top-notch driver management program that effectively trains, manages and monitors performance. At the end of the day their success is your success.


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