Executive Briefings

Applying Risk Management to Carrier Selection

Jeff Tucker, CEO of Tucker Companies, explains how a court case changed the ground rules around carrier selection and offers steps that shippers and brokers can take to reduce their risk of liability.

In 2004 the world of freight brokerage was shaken when a court held, for the first time, that a broker was liable in an accident caused by a driver for the broker's contracted motor carrier. The liability was based on a finding of negligent hiring or failure to use reasonable care in the carrier selection process.

Tucker became aware of this legal bombshell when his family company, the nation's oldest privately held freight brokerage, had difficulty renewing its liability insurance. "We began questioning some other trade association members [Transportation Intermediaries Association] and we realized that other brokers were having similar experiences, and the reason was this court case," he says. "In about 100 years of transportation, this was the first time a broker had been held liable for the actions of a contracted and authorized motor carrier."

Tucker has since become an outspoken advocate on this issue and is active in educating brokers, carriers, shippers and customers about the realities of the new environment. He even founded a new company, QualifiedCarriers.com, to help shippers and brokers assess and track a carrier's safety performance, safety rating and insurance status. "We pull data out of the Department of Transportation and give it back to shippers in a form they can use," he says.

Tucker also chaired a committee for TIA that developed a motor carrier selection framework, the fourth edition of which was recently published. Experts serving on this committee include a former administrator of the Federal Motor Carrier Safety Administration, attorneys, motor carrier representatives, large and small brokers, insurance agents and data mining experts, he says. "In the end, the only thing we could unanimously agree on was that shippers and brokers should have written procedures for hiring motor carriers and should follow those procedures all the time, including at the end of the month or quarter when freight most has to move."

The framework, which is available by clicking here, provides "thoughtful commentary for anyone looking to hire a carrier," says Tucker. "Shippers today who don't have a signed contract and who are not checking to verify that their motor carriers are authorized to be in business and do not have an unsatisfactory safety rating are leaving themselves open to huge liability," he says.

To view video in its entirety, click here


Keywords: supply chain, supply chain management, supply chain management scm, 3pl, transportation management, third party logistics, logistics management, logistics & supply chain, logistics services, supply chain risk management

In 2004 the world of freight brokerage was shaken when a court held, for the first time, that a broker was liable in an accident caused by a driver for the broker's contracted motor carrier. The liability was based on a finding of negligent hiring or failure to use reasonable care in the carrier selection process.

Tucker became aware of this legal bombshell when his family company, the nation's oldest privately held freight brokerage, had difficulty renewing its liability insurance. "We began questioning some other trade association members [Transportation Intermediaries Association] and we realized that other brokers were having similar experiences, and the reason was this court case," he says. "In about 100 years of transportation, this was the first time a broker had been held liable for the actions of a contracted and authorized motor carrier."

Tucker has since become an outspoken advocate on this issue and is active in educating brokers, carriers, shippers and customers about the realities of the new environment. He even founded a new company, QualifiedCarriers.com, to help shippers and brokers assess and track a carrier's safety performance, safety rating and insurance status. "We pull data out of the Department of Transportation and give it back to shippers in a form they can use," he says.

Tucker also chaired a committee for TIA that developed a motor carrier selection framework, the fourth edition of which was recently published. Experts serving on this committee include a former administrator of the Federal Motor Carrier Safety Administration, attorneys, motor carrier representatives, large and small brokers, insurance agents and data mining experts, he says. "In the end, the only thing we could unanimously agree on was that shippers and brokers should have written procedures for hiring motor carriers and should follow those procedures all the time, including at the end of the month or quarter when freight most has to move."

The framework, which is available by clicking here, provides "thoughtful commentary for anyone looking to hire a carrier," says Tucker. "Shippers today who don't have a signed contract and who are not checking to verify that their motor carriers are authorized to be in business and do not have an unsatisfactory safety rating are leaving themselves open to huge liability," he says.

To view video in its entirety, click here


Keywords: supply chain, supply chain management, supply chain management scm, 3pl, transportation management, third party logistics, logistics management, logistics & supply chain, logistics services, supply chain risk management