March 14, 2023
3:57 PM
In the last 5 months, we have come across this same scenario twice. All of our dispatchers know that we must conduct credit checks prior to working with brokers. So, we conduct our credit checks and the broker is approved. Literally days later, and in one instance- the same day the load was picked up, the broker becomes unapproved. In this case, we now have to directly invoice the broker and wait either 30 days or elect Quickpay.
So now we are waiting, waiting, & waiting… In hopes of being paid.
We now have implemented a second source to watch out for “fake” brokers as well. Besides the credit check with the factoring companies, we also utilize a Broker Watch List, to see if there are other carriers who have not received payments from specific brokers. This can be helpful at times, but because it is so easy to start a freight brokerage company, they can beat us to the punch. If you think about it, they have at least 30 days to scam us out of our money. You can start a business and end a business and get a lot of freight moved in 30 days.
Some things to look for prior to working with brokers:
When was the Brokerage Authority granted?
If it was in the last couple of months, I would wait and let them get some “age” under their belt. (That’s what the carriers have to do.)
When was their first activity with the factoring company in comparison to today’s date? Again, let some time go by - don’t be the guinea pig
Ensure that their authority is currently “Active”.
Look at how many invoices they have fulfilled and how long it took them to pay them.
Be sure that their insurance on file is “Active”.
When receiving emails, shy away from email accounts ending in Gmail.com, Yahoo.com, etc.
Google the broker
Now, after directly invoicing the broker, if you begin to get an eerie feeling or those emails don’t sound right, file a claim with the broker's insurance company. This has to be done in a timely manner. The insurance company only has to advertise for 60 days that they are no longer working with the broker, so you must file prior to the cancellation.
When you do find good paying brokers, stick and stay.
These should be your first points of contact when obtaining loads, but there comes a time, when
the load board is your only option. Just be sure that you are paying attention to those red flags!
Signing Off,
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