TIA (Transportation Intermediaries Association) Conference and Expo

Transportation Intermediaries Association has decided to try something new. From April 9th to the 12th they will host their very first Great Ideas Conference and Exposition. The Expo will take place in Tucson, AZ at the JW Marriott Tucson Starr Pass Resort and Spa.

This ground breaking conference is slated to focus on the great ideas brokers and 3PLs needed to succeed. The first session will host five speakers. Each one comes from within the Association's own ranks. They plan to give short uplifting speeches to get the audience started. From there, participants can go through 16 educational sessions in 4 tracks covering 4 essential areas. These sessions will include fundamental, universal, expansion, and advanced learning.

Participants can mix and match any sessions to create a unique learning experience best suited to each individual need or desire. There are 6 general sessions that will be spread out through the trade show and education sessions with the purpose of furthering insight and knowledge base of all the industry.

 Third party logistics is a $162 billion dollar ever growing industry. The Transportation Intermediaries Association is the foremost supporting professional organization in this industry. The hope that the success of this conference and exposition will keep their market moving ever forward into the future.

Today's market is filled with a constant flux in rules and regulations that steadily affect day to day operations. Knowledge is the edge every business person needs to keep up with the changing times and the TIA wants to help everyone do just that.

We will be in attendance and look forward to seeing you all there!

Shipping Advantages Provided By an NVOCC (Non Vessel Owning Common Carrier)

Today when an International shipper is looking for their best options, they might want to consider the benefits of using a Non Vessel Owned Common Carrier (NVOCC).  These shippers are able to accommodate the needs of both large and small companies.  Many government agencies also regularly utilize the services provided by a NVOCC. 

According to an article in Maritime Journal, “The N.V.O.C.C. is a freight forwarder who sells a combined transport package incorporating a sea transit. He is not a ship owner, nor does he appear to be normally involved in the chartering of ships although no doubt he could do this.”  

OTI 

Prior to a company becoming a NVOCC, they will need to obtain their ocean transportation intermediary (OTI) license.  This means they will have to be qualified as a shipper by following a variety of steps required by the Federal Maritime Commission. 

Bills of Landing 

A NVOCC operates in the same way as any other cargo carrier.  They are able to issues bills of landing (BOL).  This is a document that confirms that goods have been taken on board a vessel.  It verifies the goods will be shipped to a particular destination and consignee for end delivery.  

Experience 

Most NVOCC shippers will have all the experience necessary to handle a wide variety of cargo types.  They will be able to do importing as well as exporting.  NVOCC shippers can handle everything from over sized items to temperature sensitive cargo and more.  

Tariffs 

NVOCC will file tariffs with necessary government regulatory bodies.  This will generate the required public tariffs.  

Experience 

An experienced NVOCC will know every important aspect of cargo shipping.  They will know how to successfully book space with shipping companies.  A NVOCC will be able to provide all required documentation for the shippers they utilize.  They will be able to coordinate the efficient delivery of cargo domestically as well as internationally.  

If you would like to know more about how an NVOCC (Non Vessel Owned Common Carrier) can meet your cargo shipping needs we can help.  Contact us today and learn more.

The $75,000 New Broker Bond and the 60 Day Phase in Period

As brokers and freight forwarders prepare for the $75,000 broker bond increase, the Federal Motor Carrier Safety Administration (FMCSA) has announced a 60-day phase-in period. The increased bond requirement deadline is October 1, 2013. Brokers and freight forwarders under FMCSA's jurisdiction must file BMC-84 or BMC-85 forms reflecting the new bond amount by this date. Notices will be sent to those not yet compliant on November 1, 2013. Then, the agency will begin revoking freight forwarder and broker operating authority registrations of those still not compliant on December 1, 2013.

The new $75,000 broker bond, part of MAP-21, still comes with its share of controversy. Although several organizations support the bond as a means  to guarantee brokers will pay freight bills as agreed and get rid of those who don't, others oppose it. The Association of Independent Property Brokers and Agents (AIPBA) filed suit against the FMCSA in July, asserting that the new bond will not accomplish what it intends (to weed out fraudulent brokers) and that it was established without regard for federal rulemaking procedures.

Small brokers worry of the bond's impact on their operations and capacity to remain competitive. While the increase may create only small ripples in large companies, it poses a significant hardship for smaller brokers. Some fear it will put small, reputable brokers out of business completely.

Although brokers are still required to have the new bond in place by October 1, the 60-day phase-in period may give those who need it a little extra time to prepare before losing licensure. Small brokers are urged to work with a good accountant and banker to strengthen the company's financial standing and secure credit.

AIPBA recommends small brokers seek legal counsel for what the bond and the additional phase-in time will mean for their companies. AIPBA is currently seeking clarification for what an October 1 canceled $10,000 bond will mean for a small broker. Will the broker be able to continue operations without a bond until December 1? Or will "patch bonds" be available through the transition period?

How The New Freight Broker Bond Could Effect You

Effective October 1, 2013 there will be a new $75,000 broker bond required that is an increase being implemented by the Federal Motor Carrier Safety Administration from the previous requirement of a $10,000 bond. This will apply for all ICC Property Brokers and Freight Forwarders. To better understand what is happening with this, we need to review some of the opinions of how this action is regarded, and what is currently taking place by those who oppose this section of the act.

The Moving Ahead for Progress in the 21st Century Act includes a $75,000 Bond provision that is being opposed by several groups. According to an article from Logistics Management, the Association of Independent Property Brokers & Agents (AIPBA) has filed a federal lawsuit against the $75,000 bond, claiming that it could cause shippers' freight rates to rise. "The brokers say that bond provision is illegal and anti-competitive." There are several points being argued against this bond.

Without going into a lot of political bickering, it can be summed up best by stating that it is being argued that this particular section of MAP21 pertaining to the new bond limit is unconstitutional. Therefore, a Federal lawsuit has been filed by the Association of Independent Property Brokers & Agents (AIPBA). According to a statement made by AIPBA President James Lamb, “We are seeking justice through the federal court system for the various small business players in the trucking industry that would otherwise be adversely affected.." It is expected that the U.S. District Court will decide this section of MAP-21 is unconstitutional and will issue an injunction prior to October 1.

In the meantime, talk to an expert to understand how this will directly affect you and your business. There are surety programs available for all sized Property Broker and Freight Forwarder companies. Filing a new bond from BMC-84 to replace the existing form will satisfy the requirement. And, keep in mind that the $75,000 bond is required for any Property Brokers that previously had the $10,000 bond as well as Freight Forwarders who are now also included under the new law.

Court Says "US-Mexico Cross Border Trucking Program Will Live On!"

Despite appeals and lawsuits filed in June from the Owner-Operator Independent Drivers Association (OOIDA) and the Teamsters union, the U.S.-Mexico Cross Border Trucking Pilot Program will live on, says the U.S. Court of Appeals on July 26.

The long-haul trucking pilot program, overseen by the FMCSA (Federal Motor Carrier Safety Administration), was announced as part of the North American Free Trade Agreement (NAFTA) cross-border long-haul trucking provisions. Its stated aim is to test and demonstrate the ability of Mexico-based motor carriers to operate safely in the United States.

This pilot program allows Mexico-based motor carriers to operate throughout the United States for up to 3 years. Likewise, U.S.-based motor carriers receive reciprocal rights to operate in Mexico for the same period.

OOIDA's and the Teamsters' protests against the cross-border trucking program started as early as 2007 under a pilot program initiated by the Bush administration. Arguments continued in 2011 with the Obama administration's successor program. Complaints center primarily around questions of safety provisions: OOIDA and the Teamsters allege inconsistencies in requirements for physical examinations of drivers, licensing requirements, and drug testing. Specifically, protesters claim that U.S. truck drivers are held to increasingly rigorous standards for safety--standards not enforced in Mexican trucking programs. OOIDA purports that the pilot program gives Mexico's truckers an exemption from safety regulations and therefore creates a hazard on U.S. highways. Another claim rejected by the courts stated that the FMCSA program was too small to be scientifically valid.

Advocates of the program may point toward the explosion of trade between U.S. and Mexico as reason to continue. Total cross-border freight by train and truck surged almost 35 percent from 2007 to 2012, according to U.S. government data. Others, however, may cite data from the Bureau of Transportation Statistics and suggest the surge may have little to do with the pilot program. For instance, the Journal of Commerce (JOC), recently reported that of the more than 5.1 million border crossings in 2012, only 1,046 were completed under the pilot project.

The Bmc 84 Broker Bond may present some serious challenges to surety markets writing the bond

Many property brokers, freight forwarders and sureties are still trying to figure out all the fine details of the BMC-84 Surety Bond. Requirements of the bond were revised under the highway reauthorization law also known as MAP-21. The amount of the BMC-84 Surety Bond has been increased from $10,000 to $75,000. This new law mandates sureties to pay out claims in the following manner:

1. broker consents to payment
2. broker fails to respond following notice and the surety deems the claim as valid or
3. claim is unable to be resolved and is reduced to a judgement.

Sureties are now required to pay valid claims despite bond principal objections. Sureties must also respond to claims against the freight broker surety bond within 30 days. In addition, any action taken against a surety to recover a claim, entitles the prevailing party to recover attorney fees. However, it is not clear whether those costs can be collected along with the claim. Questions have also arisen concerning the possibility of the old BMC-84 freight broker's bond must be replaced with the new one. Some are asking if a rider or endorsement increasing the bond amount to $75,000 will comply with the new requirements. In answer, the FMSCA has announced that riders and endorsements will be accepted. One last big concern is the fact that there are still no clear cut guidelines outlining how a surety can be relieved of its liability even when the total amount of the bond had been paid out in claims.

With all these questions hanging in the air, sureties are anxiously hoping the new rules will be clarified soon

Freight Broker Insurance, do you need it?

There comes a time when a business owner can avoid  finger-pointing and a "who is ultimately responsible" type of situation if they are familiar with motor carrier safety rules, laws and even guidelines that can all be addressed with Freight Broker Insurance.  Business owners in this industry have a lot on their plates as they focus on operating their business.  Often they may not be fully aware of everything that can help protect them and the best interests of their operation.

 

Let's check out the "for instance" situation that was recently cited in the Transport Topics Issue of Trucking and Freight Transportation News - "Carriers that re-broker freight — again without separate broker authority and bond — usually are held to retain full liability as the carrier for the cargo (even though they did not transport it), but they will likely have no insurance protection for the actions of the brokered truck."  In cases like this often the business owners are not aware of what is necessary to protect them and their business in complicated and even ordinary situations.

 

This is why it is important to work with knowledgeable people who specialize in this type of industry.  First, you should consult with your insurance agent and possibly even check with your attorney. Together with your property and general liability package there are some other coverage options that you should consider.

 

It is recommended that brokers obtain vicarious auto liability insurance. That will enable your insurer to defend you if you are named in a lawsuit. Be aware that this type of coverage widely varies, so get an expert to help you review the terms and conditions to make sure it is right for you. Another option is contingent cargo coverage. This will help cover some of the gaps that might be contained in the policy that the carrier has in place. You can't be sure what exactly their policy covers, so it is a good idea to play it safe. This is also another type of insurance coverage that is not always the same in policies. You can easily find out more details if you simply contact us to learn more and get answer to your questions.

TIA Releases New Fair Labor Standards Act Framework at 35th Annual Conference

The Transportation Intermediaries Association (TIA) saw a record attendance at the 35th Annual conference held in April. Over 900 3PLs, brokers, forwarders, and suppliers attended the event, the most ever at a TIA convention, according to PerishableNews.com.

Participants received updates to the Carrier Safety Administration and MAP-21. In addition, a new Carrier Selection Framework was released. TIA members can access this new framework at the TIA website.

Conference participants also received the new Fair Labor Standards Act Framework. The working draft is accessible via the TIA website, as well. A brief discussion of this framework appears below.

The document sites two frequently occurring personnel-related issues as the foundation of the new Fair Labor Standards Act Framework:

1. the designation of workers as independent contractors versus employees; and
2. the classification of employees as exempt versus non-exempt.

Designation of workers as independent contractors versus employees is particularly common as it pertains to sales agents, transportation brokers, and similar positions. Businesses who are found to have improperly designated a worker as an independent contractor may be liable for large amounts of back pay, unpaid employment taxes, and penalties.

The issue of employee classification as exempt or non-exempt has occurred most commonly in relation to account managers or similar sales or support positions. Specifically, an employee must be properly classified as exempt from overtime and minimum wage requirements or "non-exempt" (requiring payment for hours worked over 40 per week, or over 8 hours per day in some states). Regulators assume most employees are non-exempt and should be paid overtime. Businesses found to have improperly classified an employee's exemption status face significant liability for back pay (unpaid overtime) and attorney fees.

The framework guides TIA members with greater detail through these commonly occurring personnel challenges. It serves as a resource in identifying potential challenges and making adjustments as necessary. However, members are urged to seek legal advice based on their specific situations and with adherence to any and all applicable laws. Requirements may differ by location of business, location of operations, and finer details of their business models.

FMC Chairman Cordero Voices Commitment to Increase Exports and Reduce Regulatory Burdens

On April 16, Commissioner Mario Cordero, who replaced Commissioner Richard A. Lidinsky as Chairman of the U.S. Federal Maritime Commission (FMC) earlier in April, testified to Congress regarding the Fiscal Year 2014 FMC budget. In his presentation, Chairman Cordero outlined two primary ways the Commission could promote our nation's economic recovery:

(1) working to ensure the competitiveness of our Nation’s ports and  maritime transportation system to make sure that it efficiently  supports growing exports; and

 (2) providing maritime businesses regulatory relief so they and their  customers can hire more American workers.

Because more than 80% of international trade relies on ports, Chairman Cordero stated that the efficiency of our transportation system--including the OTI (Ocean Transportation Intermediary), ocean common carriers, and marine terminal operators--is key to relieving congestion at ports, decreasing delays, and lowering transportation costs.

Chairman Cordero also reiterated a commitment to continue assisting U.S. exporters in 2013. Agricultural exporters can look forward to a container shipping rate index for a few targeted export commodities such as grains, cotton, hay, and frozen meat. It is anticipated that with such an index exporters could plan and hedge their transportation costs.

Other new developments include a searchable database of NVOCC (Non Vessel Owned Common Carriers) on the FMC website. Small businesses that want to start exporting, as well as individuals shipping personal goods, can use the search tool to find nearby licensed and bonded freight forwarders.

Chairman Cordero and the FMC have committed to continued efforts to reduce regulatory burdens, thereby initiating cost savings and flexibility for the shipping industry and its customers. Progress was made in 2012. Chairman Cordero cited the following:

• changes to procedural rules to improve just, speedy, and inexpensive resolutions in administrative proceedings.
• revisions in tariff exemptions which eliminate record keeping requirements for negotiated rate arrangements offered by U.S.-based NVOCCs.
• initiation of dialogue on a proposed rule that would expand these tariff exemptions to foreign-based unlicensed NVOCCs.
• reviews of regulations concerning the licensing and oversight of OTI (Ocean Transportation Intermediaries), the process for review of filed agreements, and rules regarding service contract filings.

Chairman Cordero stated that the Commission will continue to solicit input from the shipping public and the regulated industry about how to streamline and improve its rules.

Asses Risk to Determine The Insurance Needs

Cargo Insurance

Geo-political hotspots and natural disasters have combined to sharpen the focus on risk management for both carriers and shippers. Efforts to ameliorate the effects of such potential causes of loss will undoubtedly grow more intense in 2013. Cargo insurance will be as vital a tool as ever in risk management.

Successful attempts to mitigate loss anywhere in the supply chain will add to the bottom line in important ways. Potential commercial losses can be quantified as a first step toward developing strategies to limit such losses.

Potential Scenarios

Supply chain strategists try to ponder every possible scenario that may arise. Success in this area may literally determine victory or loss. Likewise, the advantages of mapping out alternative supply chain scenarios can be substantial. Complex analysis can be required to try to anticipate the unpredictable.

Only a few years ago, most would have scoffed at the nightmarish losses generated by a Japanese tsunami or by pirates off the Somali coast. Then, these heretofore unimaginable threats turned all too real.

It may be very demanding to assess risks presented by threats as diverse as terrorism and computer systems failure. The potential impact of accidents and quality control issues must be fully understood as well. The potential for changing export restrictions is another area to concentrate on. The analytical expertise required crosses many disciplines.

Probability Assessment

This invariably leads to another key effort -- probability analysis. Extreme risks can be identified, but there are never enough resources to address every possibility all the time. That is where statistical probability needs to be considered to mitigate risk.

A successful enterprise will tackle these challenges by successfully managing risk across widely divergent areas. It is possible to quickly respond to supply chain disruptions when the unexpected occurs. Those whom adapt are also effective at stabilizing their bottom line.

For further insight into how successful risk management can help your enterprise, please contact us.

 

Scrap Metal Scams, a Hazard for International Freight Forwarders

 

As prices for all metals continue to climb, there has been an increase in occurances of illicit scrap metal trading. International Freight Forwarding companies are often unwitting accomplices to these schemes. Recently, the British International Trade Association (BIFA) issued a warning to its members and to the international trading community about this issue. The UK Parliament had recently introduced a Scrap Metal Dealers Bill. This bill would make it illegal to pay for scrap metals with cash. The concept was that many scrap metal dealers use cash for their illicit transactions.

 

This concern was addressed by Peter Quantrill, BIFA Director General in an interview with Handy Shipping Guide. His advice was to urge freight forwarders to alert the proper authorities to any suspicions that they have about scrap metal shipments. The UK parliment felt that they had addressed the problem of scrap metal theft by making it illegal to pay for scrap metals with cash. The inadvertent result of such legislation is that the problem has been transferred to freight forwarders as criminals seek to export their stolen scrap metals.

 

BIFA is asking that its members report any suspicious looking shipping containers. Organized criminals use shipping containers to transport stolen scrap metals to various locations. Freight forwarders who handle these containers are in a position to recognize and report such suspicious activities.

 

Some indicators to look for are containers found in unusual locations such as brown fields, industrial units, farms and residential addresses. These unorthodox locations might indicate illegal shipments.

 

Although this warning was issued in the UK, shipping is a global activity and criminal enterprises often cross international boundaries. Freight forwarders across the globe can help to monitor and report instances of criminal activity. Knowing what to look for can help freight forwarders avoid becoming accomplices to criminals seeking to ship stolen scrap metals.

A Brief Overview of the Carmack Amendment

The Interstate Commerce Act was established in 1887 to deal with the rise of the railroads and the growth of cross country travel and freight delivery. The intent was to regulate interstate transportation.

In 1906, the Carmack Amendment was added to the Interstate Commerce Act which was enacted by Congress to establish uniform federal guidelines for shipping across state lines. These guidelines were designed to reduce confusion surrounding a carrier's liability when there was damage to a shipper's interstate shipment.

The Carmack Amendment establishes the limits of liability for the carriers. The liability imposed is for the “actual loss or injury to the property”. There are no caps on liability the carrier assumes through the Carmack Amendment. Therefor, when the carrier takes possesion of the cargo they become 100% liable for the load.  

The carrier and the shipper sign a contract named a "bill of lading". The Carmack Amendment allows some carriers to limit their liability in this contract. The amount they assume for cargo damage can vary, but it's generally around $1 Per Lb.
The Carmack Amendment supersedes individual state laws and ensures that all parties are treated with one set of rules. This also means that any state law claims can be dismissed, as the Carmack Amendment takes precedence.

There is a protocol for filing claims under the Carmack Amendment. In order to bring a lawsuit, a written claim must be filed with the carrier within nine months of the date of the delivery of the property. If no delivery was made, then the claim needs to be filed within nine months after a reasonable time for delivery has passed.

Feel free to contact us with any questions or concerns you may have about the Carmack Amendment or other shipping related laws. It's our speciality and we're happy to help.

Do Freight Brokers Really Need Auto Insurance?

Freight Brokers wrestle with many questions when deciding cost management strategies. One of the biggest is whether or not they need Auto Insurance. The straight forward answer is absolutely. There are so many unpredictable, uncontrollable forces out there, (accidents, storms, hijackings, theft, vandalism) that it's impossible to avoid a lawsuit sooner or later, even if you have nothing to do with the incident. Just having your cargo there can put you at risk. If a truck gets into an accident, the first thing lawyers want to do is drag everybody they can into court. The average claim on an auto accident is about 2.6 million dollars. Without proper Auto Liability Insurance, such a claim can be devastating to a business. Liability costs for shipping skyrockets, severly impairing profitability.

There are many steps you can take to protect your assets and not face serious punitive damages as a result of death or injury from the movement of freight. One of the best steps is having someone with years of industry experience to review your current business model & current contracts in place. GSIS, Inc. is a leader in Risk Management education and Insurance Solutions. Our company is focused on educating our clients on risk management stratagies for the freight broker industry. We are always interested in spreading current news topics relating to the industry including major catastrophes and current laws that effect the Freight Broker/Transportation industry. Contact us at http://www.gsis.com

Here at Global Solutions Insurance Services Inc. we deal in the many forms of domestic and international trade insurance and our trained professionals help you choose a policy that fits your needs perfectly.

Acting outside the box of a "Property Broker"

I recently read an article in which a Property Broker was successfully sued for an accident that resulted in the death of one man and other serious injuries. What had led up to the verdict is as follows:

 

A Carrier was involved in an accident with 3 cars, killing one person & seriously injuring others. The Carrier, like 90% of the carriers on the road only carried $1 Million in liability coverage. The lawyers on the case recognized that they needed to find a fatter pig to feed the hungry mouths of the injured victims and suffering family. They successfully found that pig when they recognized that the property broker that brokered this load was a major player in the industry. Also, through some more research in the SAFER site it was discovered that the carrier of the load had a terrible safety record (I.e. 238 safety violations, 3 accidents, 1 more fatality in 18 months prior).

 

Through even more investigation it was found that the Property Broker an additional DOT authority (Something that is common in the Third-Party Logistics world). At the time of the accident the Broker had common carrier authority. This exposed them to the Carmack Amendment in which they were exposed to potentially unlimited Liability.

Statistics:

 

Ø  5000 fatalities a year on average take place relating to common carrier accidents within the U.S.

Ø  120,000 injuries a year on average take place relating to common carrier accidents within the U.S.

Ø  Actuarial statistics support average settlement for fatality in U.S involving a common carrier is 2.6 million.

Ø  It’s estimated that 90% of companies with common carrier authority only have 1 million of auto liability coverage.

 

The Storm was perfect, the broker failed to do what is arguably one of the most important jobs of a property broker which is Vetting the Carriers it chooses to tender loads. Further, the broker left himself wide open for lawsuits under his authority of a common carrier.

 

This is a prime example of the importance of a proper Risk Management Plan. GSIS,inc. is dedicated to success of every business and person we touch. Each insured is offered Risk Management Consulting Services. Our goal as an insurance provider is not only to be there when the unthinkable happens but also, minimize the exposures before the unthinkable occurs.

 

Review of Exposures: Domestic Freight Brokerage Industry

Domestic Freight Broker’s moving freight through third party trucking, rail carriers and airlines have financial exposures that are truly unique from any other industry. A thorough and complete understanding of financial exposure is critical to the long term success of a Freight Broker or Freight Forwarder.

It is important to first understand the risks and financial exposures then design a program with the support of knowledgeable professionals dedicated to the logistics industry. The ultimate goal should be to design a Risk Management, Claims Control and Insurance Program that responds to the exposures that are unique to your firm and the customers you represent.

Unique Exposures for Domestic Freight Brokers:

A company staying within the box of domestic freight brokerage is known as an asset free company. This means they do not move freight with their own equipment but rather use third parties (trucking operations, rail carriers and airlines). As a result, they never take cargo they are hired to move into their care, custody or control. The Carmack Amendment implies that the Freight Broker’s don’t actually assume liability to the cargo they move. This does not, however, guarantee they won’t be dragged into a claim when one arises which means the cost associated with defending themselves and responding to cargo claims can not necessarily be avoided.


Methods of addressing exposures:

 1) Contracts – The trading terms and conditions in which you operate under should communicate the extent of your liability should something go wrong. The Transportation Intermediaries Association (TIA) has a recommended format and it would be advisable to become a member.

Recommended Contracts:

• A Shipper/Broker Contract establishes an understanding on the extent of broker’s liability to the freight he is moving.
• A Carrier/Shipper/Broker Contract establishes the extent of liability a carrier (trucker, rail carrier or airline) has to the cargo being moved.

Be aware that most major shipper’s will ask you to sign their format of shipper broker contracts. These contracts should be reviewed with the support of an attorney dedicated to the logistic industry. These contracts should also be reviewed with your insurance agent as your signature could potentially impact the coverage you have in place. Your insurance carriers, in many cases, can invalidate your coverage if you unwittingly increase your legal liability without giving them the opportunity to review and approve of the contract.

2) Technology and Procedures – This can help your firm minimize human error and the exposures that could result from these errors. Technology has been developed specifically to assist freight broker’s track shipments and monitor the insurance coverage a carrier has in place. Written procedures that all employees are required to follow might also help in reducing exposures.

3) Work with Professionals knowledgeable and dedicated to the logistics industry – Attorneys and Insurance Agents have areas of expertise, therefore, you should try to work with professional who are knowledgeable in your industry.
Attorney’s experienced in the risks associated with logistics can help you interpret your exposures, set up a corporation to protect your private assets and provide council on legal issues relating to transportation.

Insurance Agents dedicated to the logistics industry will provide you with insurance carriers and coverage that are unique to this industry. They will also be able to help you evaluate your exposures after better understanding the full extent of the services you offer.

An insurance program can then be designed around the services you offer, the nature of clients you have, the contracts you have in place and the cargo that is moved by your firm.

4) Professional Claims and Recovery Firms – Professional claims adjusters and recovery experts can help freight brokers collect difficult claims from carriers and third parties. Their services are typically offered on a no cure, no pay basis. Fees can range from 30%, to as low as 10% of the amount recovered depending on the size of the claim.

5) Insurance programs designed to address the intricacies of your operation – An insurance policy is a contract that transfers some of the financial risks and exposures inherit in your business to an insurance company willing to accept these exposures. Understanding what is and what is not covered is critical. For that reason, you should request a sample policy, prior to binding coverage, and make sure you read and thoroughly understand your policy. Your insurance agent should be able to help you interpret the policies put in place for your firm. It is a good idea to pose any questions you may have to your insurance agent with a request that underwriters review and respond back in writing. It is important to note that when questions arise that the insurance carrier responds back in writing.

Your policy is the contract in place between you and your insurance carrier therefore it is very important that you have a clear understanding of the coverage it will provide.

Typical Insurance Policies in place for a Freight Broker or Domestic Freight Forwarder include:

• Contingent Cargo Policy
• Contingent Cargo/Contingent Auto Liability Policy
• Shipper’s Interest Cargo program
• Excess spot Cargo Insurance Program (when Truckers Motor Truck Policy limit isn’t high enough to match value of cargo being shipped)
• Cargo Legal/Errors & Omissions Policy
• Comprehensive General Liability Policy
• Crime and Employee Dishonest coverage
• Property Insurance – Covering owned building and/or contents
• Business Auto – Non owned and hired coverage (if employees use their vehicles for company related work)
• Umbrella policy – Increasing the limit of your GL, Auto Liability or Employee Liability
• Workmen’s Compensations with employee liability coverage

Small things are often overlooked which can result in serious problems later on. It is important to take the time to be diligent in evaluating the exposures your company will incur. Utilize the support of professionals dedicated to your industry as this will put you in the best position to design your Risk Management, Claims Control and Insurance program to address the exposures your firm could incur moving freight.