At our last HNI University webinar, “Freight Broker Liability: Do You Understand Your Exposures?” we talked through some of the things freight brokers can do to shield themselves from risk. As a broker, how you manage relationships with your carriers is one of the things that set the stage for your liability.
In some cases, brokers are dealing quite directly and routinely with the actual truck drivers at their carriers. In such relationships, it has been successfully argued in court that the broker has actually adopted the driver as its employee and can be held liable for their actions. The Sperl V. Henry case is the best example of this, and resulted in a $23.8 million judgment against the broker.
Maintaining a distance from the drivers employed by motor carriers is essential to decrease your liability as a broker. In our webinar, Greg Feary went through a couple of guidelines on how brokers should execute relationships with carriers.
1. Send rate confirmation sheet to the carrier, not the driver
When sending rate confirmation sheets to communicate details of the load (including the type of load, route, origin/destination, etc.), this should be directed to the carrier and not the driver. If instructions need to be communicated to the individual driver, the broker should communicate with the carrier asking them to instruct the driver as necessary.
2. Avoid selecting routes for drivers
Avoiding specific route selection can decrease freight broker liability. Brokers may provide route guidance to carriers, but this should not be communicated directly to the drivers. Any route information should be given to the carrier to be passed on to the driver.
3. Avoid dispatch driver communication
Dispatch communication between broker and driver of the carrier is fairly common, and can sometimes difficult to avoid, but if at all possible, direct communication with the drivers should be limited. It is a better practice to communicate through the motor carriers dispatch team to reach the driver when needed.
If you do communicate directly with drivers, be sure to follow up with the motor carrier.
4. When working with a one- or two-truck operation, take extra care to make a distinction between the carrier and the driver
This can be a major hurdle for many brokers who often deal with one- or two-truck driver/motor carriers. It becomes a challenge to distinguish when a broker is communicating with the motor carrier as an entity (“John Doe Trucking Company”) versus the driver himself (“John Doe the driver.”) Emails, faxes, and all documents should indicate when the communication is intended for the motor carrier as a business entity.