Carrier Vetting for Freight Brokers

May 26, 2025

Carrier Vetting for Freight Brokers

In the freight industry, partnering with an unreliable carrier can devastate your business far beyond a simple delivery delay.

Carrier fraud is a growing problem, and the financial impact is serious. A Transportation Intermediaries Association (TIA) survey shows that companies lose an average of $400,000 to freight-related scams. These losses aren’t just numbers. They represent stolen loads, broken trust, and weakened operations.

This article will cover how to properly vet carriers to protect your bottom line and avoid being a victim of scams like double brokering.

Verify Operating Authority and License

Every reliable carrier must have operating authority granted by the FMCSA. This is the first and most essential step in the carrier vetting process.

Use the FMCSA database to verify:

The carrier’s USDOT and MC numbers.
That their operating status is active and not pending or revoked.
The authority type matches the freight they handle.
The legal name and contact information match all the documentation provided.
History of revocations, reinstatement, and company name changes.

Assess Insurance Coverage

Before working with a carrier, always verify that they carry the right insurance.

At a minimum, they should have active liability and cargo insurance. Liability insurance protects against damages caused during transit, while cargo insurance covers the goods being transported.

You can request a certificate of insurance (COI) from the carrier or contact their insurance provider to confirm the policy is valid and active.

Insurance coverage requirements vary based on the type of cargo being transported:

A minimum of $750,000 in public liability insurance is required for carriers transporting non-hazardous materials.
Hazardous materials carriers need between $1 million and $5 million.
Carriers transporting household goods need to maintain cargo insurance of at least $5,000 per vehicle.

Verify that a carrier’s insurance policy explicitly covers the types of cargo your brokerage handles. Also, review any exclusions or limitations in the policy that could affect coverage, such as restrictions on certain routes, weather conditions, or types of cargo.

Evaluate Safety Records

Safety records provide valuable insight into a carrier’s compliance with federal regulations and commitment to maintaining safe operations. This essential step in the carrier vetting process involves the following checks:

Check the Compliance, Safety, Accountability (CSA) score. High scores in areas like unsafe driving or hours-of-service violations can be red flags.
Review inspection history for patterns of violations or issues with equipment, driver conduct, or documentation.
Look for out-of-service rates. These rates indicate how often the carrier’s vehicles or drivers were deemed unfit for operation.
Search for crash reports. Frequent or severe crashes may indicate unsafe practices.

Failure to review a carrier’s safety ratings can cause accidents and cargo damage. Your freight brokerage can be held liable for working with carriers with poor safety records.

Check Experience and Reputation

Find out how long the carrier has been in business and what industry peers say about their performance. Platforms like Google, DAT Carrier Watch, Carrier 411, industry forums, and Facebook groups can show:

Complaints about missed pickups and deliveries.
Feedback from other freight brokerages.
Level of professionalism and communication.
Experience with your specific freight type.

Confirm Equipment and Capacity

Not all carriers are equipped to carry every load. Verify their operational capacity by asking about:

Equipment types and specifications, e.g., trailers, trucks, or other specialized requirements.
If the equipment is in good condition and properly maintained.
Load capacity.
Number of trucks and lanes they run.

Understanding freight requirements helps avoid the risk of service failures and similar challenges. GPS tracking is particularly valuable for time-sensitive or high-value shipments.

Use Reliable Vetting Tools

Modern freight brokers have access to technology that can automate the vetting process with third-party tools like:

Registry Monitoring Insurance Services (RMIS): Automates insurance verification.
Carrier Assure: Checks safety rating, compliance information, and other related data.
Load tracking software and Transport Management Systems (TMS): Provides insights on a carrier’s performance, like delivery time, load confirmation, and other metrics.
Industry platforms (Carrier 411, Freight Guard, etc.): Provide reports on carrier history, including negative behaviors and incidents.

These tools simplify the carrier vetting process and make due diligence easier by reducing manual efforts.

Best Practices for Ongoing Carrier Management

Carrier vetting is not a one-off task but an ongoing process, so implement these practices to maintain strong carrier relationships:

Re-verify operating authority and insurance every 90 days.
Monitor carrier performance and delivery times.
Create standard onboarding procedures for new carriers.
Conduct regular audits of your carrier network.
Track complaints from customers.
Keep all signed documents properly in a secure system.
Encourage clear and open communication.

Following these practices also builds trust with carriers, helping your brokerage run smoothly and avoid costly hiccups.

FAQs

1. What are the types of freight fraud to guard against?

The most common types of freight fraud to detect and prevent include identity theft, double brokering, cargo theft, and insurance or phishing scams.

2. What should I do if I am a victim of carrier fraud?

In such cases, follow the steps on the FMCSA’s broker, carrier fraud, and identity theft page.

3. What legal documents do I need when working with carriers?

You need a signed broker-carrier agreement, W-9 forms, a certificate of insurance, operating authority verification, and a rate confirmation for each load. These documents will protect your business legally and help enforce expectations.

Final Thoughts

Vetting carriers is a key part of protecting your freight business. With fraud on the rise and high costs at stake, verifying carrier details and spotting warning signs can save you from major losses.

For brokers looking to get it right from the start, the 90-Day Freight Broker Course offers step-by-step guidance on carrier vetting for freight brokers, verifying critical information, and everything else to help you start and grow your freight brokerage.

It also covers the freight broker documents you need to enter compliant relationships with carriers and provides templates to help you get started. This ensures your brokerage is legally protected and adequately set up for success.

Sign up to get started today.

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