“High tech and high touch.” That sums up the distinctive approach of General Transportation Services. The Portland, Oregon-based freight broker and 3PL prides itself on outstanding service to approximately 2,000 shipping customers, matching their freight to dry vans, flatbeds and reefers from 8,000 independent carriers across North America.

The “high tech” aspect of the business is provided by the 3sixty™ Logistics Suite transportation management system (TMS) and its integrated, companion products, 3sixty Imaging Suite and TransCore’s integrated freight matching service.  The “high touch” is an attitude as well as an operational guideline.

“No matter what the customer asks, we can find a way to do it,” said Dean Altenhofen, who has served as the company’s General Manager since 2004. 

That attentiveness to customer service has helped General Transportation Services to grow from a local partnership in Portland to a national concern with six regional offices. They match freight with dry vans, flatbeds and reefers, both as a broker and as a third-party logistics provider with exclusive customer relationships.

The 3sixty transportation management system provides the high-tech support for the company’s operations – with only three people in the back office, processing freight bills, invoicing customers and paying carriers. General had the same staff level when it opened its doors in 1990, but today, “a lot of customers send us orders over the Internet, and that feeds right into our TMS system,” said Richard Fink, one of General Transportation’s three partners. This direct approach, which is enabled by 3sixty Logistics Suite, saves time, increases responsiveness and improves accuracy.

“High touch” is also an important element of General Transportation’s carrier relationships. “Our goal is to talk to every driver every day,” Altenhofen said. “We have hundreds of shipments in motion, but that is our goal.”

“We document that in Check Call,” said Altenhofen, referring to a screen in the 3sixty Logistics Suite. “It automatically stamps the name of the user and what time they entered the data,” he said. The system also tracks the location and availability of vehicles, so when a customer order comes in, General is usually quick to find the right truck.

The company’s high-touch approach succeeds where a purely high-tech method might fail.  Fink recalled an instance when “a customer called and said he wasn’t able to cover a load for three weeks. We referred it to our office in Tennessee, and we had it covered in five minutes,” Fink said. “That’s because we talk to the carriers. The customer just sent e-mails, but it’s easy for a carrier to reject an e-mail if it doesn’t fit into that day’s profile,” he concluded.

The company extends its connection with carriers to the drivers themselves. “We have the drivers’ cell numbers, and we have someone on call 24 hours a day, seven days a week,” said Fink. If a problem arises, he said, “the driver is to call us. Then we immediately call the shipper,” he continued. “When you have people and machines and weather, things are going to go wrong. In those cases, we try to execute the perfect service failure,” Fink said.

What is the impact on customer relationships? “It is very positive,” said Altenhofen, the general manager. He noted, however, that there is also an inherent challenge when the bar is set so high. Altenhofen gave an example of a customer who sat down with General’s management for a year-end review and focused on a single service failure. While Altenhofen was glad to know the company had provided an entire year of excellent customer service with only one exception, he strives to improve even on that record.

“You can win eight million times, but if you miss once, you don’t know what the consequences are for the customer,” he cautioned.

Maintaining a near-flawless service record is a significant achievement, because company operations are dispersed, diversified and complex.  Altenhofen credits Logistics Suite for keeping the company on track.

“This is our whole world,” Altenhofen said of Logistics Suite. “We don’t utilize five or six different systems to get our work done. We use 3sixty Logistics Suite.”

 “Our brokers can go to one screen and get all the information they need on the orders, on the history, the carriers, to make the matches that they need,” he said. Altenhofen himself relies on the management analysis screens in 3sixty Logistics Suite to keep an eye on the day-to-day operations, while General Transportation’s partners and accounting staff make use of the 3sixty Imaging Suite to handle important documents and monitor receivables, payables and overall cash flow.

“I can’t imagine doing without it, Altenhofen said. “I can’t run the business without it.”

Ronald H. Usem is a transportation attorney and partner at Minneapolis-based law firm of Huffman, Usem, Saboe, Crawford & Greenberg. Mr. Usem also serves on the Director’s Circle of the Board of Directors of the Transportation Intermediaries Association (TIA), the professional organization of the third-party logistics industry.

Mr. Usem will discuss due diligence in greater detail at a webinar about “Due Diligence and Certificates of Insurance” on Thursday, October 16. He will be joined by transportation insurance expert Mark Yunker. Register for this free webinar, which is sponsored by TransCore.

Why is carrier qualification necessary?

It is good business practice.  Recent case law also dictates brokers, shippers and third-party logistics companies must exercise reasonable care and due diligence in selection of a motor carrier, in order to reduce risk of loss for personal injury and death.

Do I need a signed copy of the carrier’s insurance certificate?

I am frequently asked whether a broker must have a “signed” copy of an insurance certificate.  The answer is yes. It should be “signed” either electronically or in handwriting. Under the Electronic Signatures Act, 15 USC 7001, the contract may not be denied legal effect solely because it is in electronic form and solely because an electronic signature was used in its formation.

What is the case law that is relevant to the issue of carrier qualification?

There are four cases that have demonstrated a shift in the court’s treatment of brokers and third party logistics providers:

Schramm v. Foster, 2004. A broker was held potentially liable for personal injuries caused by a motor carrier that was hired by the broker to transport freight. The Court indicated that a broker must exercise reasonable care and due diligence in the selection of a motor carrier.  The case was settled and did not go to a jury.

Puckrein v. ATI Transport, 2006. A shipper was held liable for negligent hiring of a motor carrier. The shipper knowingly hired a carrier which had a defective brake on one wheel.  The truck was involved in an accident where one person was killed and another was seriously injured.  The shipper was held liable.

Jones v. DeSouza (C.H. Robinson), 2006. In a case very similar to Schramm, the court found the broker liable for personal injuries for failure to exercise reasonable care in the selection of a motor carrier.  In this case, the carrier had a conditional safety rating, even though Robinson’s contract required it to use only carriers that had a satisfactory rating.  The Court indicated where the carrier has a conditional safety rating, you must look at the Safestat scores.  The Court also indicated Robinson was acting as a third-party logistics company which was subject to the same due diligence obligations as a broker. 

Why are these cases important to my company?

While these three cases established law in Maryland, Virginia and New Jersey, other courts in the U.S. are free to follow this precedent and hold a broker, shipper and third-party logistics company to the same reasonable care and due diligence standards imposed by those three states. 

What is the best way for a broker or 3PL to be protected against liability claims?

The question for brokers is how much reasonable care, due diligence is enough?  The answer is not clear cut.  It depends on the facts of the case. The best way to protect your company against liability is to prepare immediately and thoroughly for any future occurrence.

1. Write a carrier qualification protocol and follow it, if you haven’t already done so.
2. Establish a procedure or checklist, so you can prove that you followed your own protocol.
3. If you do not follow the protocol, make a record of each exception and the reasons for the change in procedure.
4. Have your Board of Directors adopt the carrier qualification protocol at a Board meeting to demonstrate the importance of safety as company policy.

If there is a serious accident, and the injured party sues the broker, the shipper or third-party logistics company, what other protective actions can be taken?

Ultimately, regardless of carrier qualification procedures used, if the Plaintiff is a driver’s widow, or some other seriously injured party, Plaintiff’s lawyers may seek a “deep pocket.”

In addition to following the carrier qualification protocol referred to, you must have insurance to protect you from this risk. You should also prepare yourself in advance for a catastrophic loss, by developing a checklist of actions you will take in the event the unthinkable occurs. The checklist should include investigating the claim by obtaining copies of all police and media reports, and all facts concerning the accident. 

Do I need a lawyer, or can I rely on my insurance agency to defend me?

In case of a serious injury accident, you should contact a qualified personal injury defense attorney immediately to help you with the investigation and monitoring of the claim. Obviously, you must also notify your insurance underwriter. The reason for obtaining the services of a personal injury defense attorney is that the claim might exceed your insurance limits, and therefore you may need to be prepared to defend yourself.

Need a flat? You'll find it faster on a TransCore load board. Powered by the legendary DAT® Network, TransCore's freight matching services offer the industry's most varied selection of trucks, by equipment type and carrier fleet size.

As part of the company's routine diagnostic testing, TransCore runs frequent truck searches in five U.S. states. Each state tested is representative of its geographic region. TransCore's usability experts also compare the performance and composition of our freight matching services against other load boards.  Our database analysts also evaluate the DAT Network to learn more about our customers and community.

Here's what we found:

• More than 57% of carriers in the DAT Network own no more than five trucks each, and another 12% own between six and ten trucks.
  
  
  
  
• TransCore's DAT® Network includes more trucks of all equipment types. In some cases, the "DAT" has 50% to 100% more of a specific equipment type - flats, for example - than other companies' load boards.
  
  
• Volume on the DAT Network doubled between January and May 2008, representing a 42% increase over the comparable period in 2007.
  
  
• DATconnect and 3sixty Freight Match enable users to search for specific equipment types, as well as loading and unloading dates and locations, so brokers can find the right truck faster.
  
  
• All posts on the DAT Network is updated and refreshed daily, so the truck posts are more relevant - and so are the phone calls from carriers when you post a load.
  

Taylor, founder and President of Eagan, Minnesota-based freight brokerage Network FOB, was reviewing his perfect record for the 18 months since Network FOB began monitoring carriers with TransCore’s CarrierWatch SM. Taylor relies on CarrierWatch, along with other TransCore products and services, to improve efficiency and reduce operational costs.

Taylor runs the operation with help from TransCore’s 3sixty™ Logistics Suite, a transportation management system (TMS) designed specifically for freight brokers. The TransCore TMS has enabled Network FOB to grow from 17 brokers in 2005 to 50 today, with only a handful of back-office employees. Network FOB also uses TransCore’s 3sixty Freight Match to find the carriers and trucks that cover their exception freight.

To save time and mitigate risk during the company’s rapid growth, Network FOB relies on CarrierWatch. The TransCore carrier monitoring service is updated daily, so Network has constant access to current data on its carriers’ authority, safety ratings and insurance coverage.

Taylor’s reliance on the TMS and CarrierWatch is indicative of his overall management philosophy. He examines every aspect of his business regularly, looking for ways to save time and money. Taylor credits this vigilant management style for Network FOB’s success: Company revenues reached $27 million in 2007, with only four employees, one full-time contractor and zero debt. According to Taylor, Network FOB is on track to achieve $8 million in revenue per employee in 2009 while remaining debt-free. He credits CarrierWatch for enabling Network to call upon the hundreds of carriers that service the company’s expanding transportation needs.

“I don’t think we could grow like we’re growing, as trouble-free as we’ve been, if we didn’t have CarrierWatch,” Taylor concluded.

Working in an all-agent environment poses special challenges, according to Taylor. “An agent is an independent businessman. He is not your employee,” Taylor noted. Agents cannot always be forced to comply with corporate directives, and not all agents are diligent about due diligence.

“You ask an independent businessman to go verify a trucker’s authority, and maybe he will do it. But maybe he won’t,” Taylor said. Network FOB’s risk mounts as the company grows, he noted. “With this number of loads, pretty soon the mathematical odds of having a catastrophe are right in front of your face.”

Network FOB maintains a carrier watch list on file with TransCore. Network FOB’s watch list is monitored daily, and TransCore automatically updates the status for every carrier on the list. TransCore obtains insurance certificates for each carrier and delivers coverage details electronically to Network FOB. TransCore also maintains an online file that contains electronic images of the actual insurance certificates. Network FOB agents or management can view an image of each certificate by logging into the CarrierWatch web site. This premium service saves time and aggravation for Network FOB and its agents. CarrierWatch data is also integrated into the 3sixty Logistics Suite, TransCore’s TMS for brokers. The combined programs prevent agents from dispatching bad carriers.

“CarrierWatch takes care of it for us,” said Taylor. “It’s a big deal. It keeps you from having a problem,” he said.

CarrierWatch also serves as a recruiting tool for new agents, according to Taylor: “They [agents] don’t have to collect the insurance certificates ever again, because CarrierWatch is going to load that up,” said Taylor. Agents can focus on moving freight, because insurance paper work is no longer a distraction, Taylor explained.

“I ask them: ‘Did you ever get stopped in the middle of a dispatch?’ This is my sales pitch,” he continued. “Those things are very frustrating to an agent.”

“The insurance certificate that the trucker sends you could be fraudulent,” Taylor added. “That’s the reality.” Getting a certificate directly from the insurance agent is a solution, but it would be time-consuming for Network FOB’s office staff or agents. Also, an insurance agent may not notify brokers when a carrier’s insurance is cancelled for non-payment. CarrierWatch provides daily updates that incorporate FMCSA and DOT-reported data with the actual insurance certificates, so Network FOB’s records of carrier insurance, authority and safety ratings are always current.

The results speak for themselves. “We did not have any claims on uninsured carriers in 2007, nor have we in 2008, so far,” Taylor said proudly. “Granted, in truckload freight brokering, you really don’t run into a lot of claims. But you do get some,” he said. “We had a $100,000 rollover,” Taylor remembered, “And it was fully covered by the carrier’s insurance company.”

“That’s the proof you want,” he concluded. “Not one uninsured loss.”

Rate Index™ Pro for Bulk Rate Pricing and Real-time Negotiations Based on 12 Million Actual Freight Bills

Respond to RFPs quickly and painlessly with Rate Index Pro.  Anyone involved in truckload lane rate pricing and contract negotiations will appreciate the speed and efficiency of this web-based service. Perform single-lane lookups in real time or submit a multi-lane request to receive prevailing market rate data in minutes. TransCore’s Rate Index Pro is available by monthly subscription, and is priced according to customer usage.

To learn more about Rate Index Pro, go to:  http://360.transcore.com/rate-index

It’s a common story. You think your insurance will cover your needs until an unforeseen situation shows the gaps in your coverage. This certainly applies to motor carrier’s insurance, which can contain limitations, perils, commodities exclusions, radius restrictions, and sanctions for criminal acts, unattended vehicles, or acts of God.

More complicated issues like double brokering a load or using a truck or trailer that doesn’t appear on the carrier’s cargo policy can have an enormous impact on insurance claims. In these complicated matters a broker’s goods could be traveling the highways without proper coverage—or they could be altogether unprotected.

Another issue affecting brokers is that, unfortunately, in these cases the burden of proof is typically on the cargo owner. This is difficult because the broker is expected to file charges against the carrier, but without the ownership or an insurable interest in the goods, the carrier is under no obligation to accept a loss or damage claim made against it by a freight broker. This is only one example of the many unexpected situations not covered by carrier’s insurance.

The bottom line is that this can leave you holding the bag—exposing you and your business to unexpected losses or, even worse, a damaged reputation.

That’s where Shipper’s Interest comes in. Shipper's Interest is a broker's insurance provided by Registry Monitoring Insurance Services, Inc. Shipper’s Interest protects the customer’s goods and covers many of the gaps that brokers who rely on carrier’s insurance are exposed to. It is designed to cover the unexpected risks. The policy covers up to $1,000,000 per shipment, and the coverage can be secured for individual or volume shipments. One major advantage to Shipper’s Interest is that it covers 100 percent of the actual invoiced sale: Carrier’s coverage limited liability offers much less compensation.

Here are some other benefits of Shipper’s Interest to your brokerage:

• Shipper’s Interest coverage will pre-approve broker’s commodities so there is no possibility of a commodity exclusion preventing claim payment.
• The coverage also protects your contracts with customers, which directly affects your shipment volume.
• Claims are paid directly to your customer on the actual value of the goods shipped.
• Shipper’s Interest will pay within 30 days of the submitted claim.

You are part of a complicated partnership with the goods supplier and the trusted carrier. So it is understandable that the insurance matters are equally complicated. The goal is for the broker not to have a false sense of security, while in reality being completely exposed to liability risks from any number of events that are not uncommon in freight transportation. Shipper’s Interest offers a way for you to turn a false sense of security into real security. Now that’s keeping your interests in mind.

"Hot Fuel" burns a hole in drivers’ pockets

The phrase “hot fuel” refers to diesel fuel or gasoline sold at retail pumps at temperatures higher than the century-old government standard of 60 degrees. That is the temperature used in the petro-chemical industry to measure all petroleum liquids.

At the 60-degree standard, a gallon of diesel delivers a certain amount of measurable energy to move a truck down the road. But when expanded by higher temperatures, a gallon actually contains less fuel and delivers less energy.

Let’s say your tanks hold 200 gallons of fuel. Here’s what happens if you fill them with 75-degree diesel: It still takes 200 gallons to fill the tanks, but because you’re buying temperature-expanded fuel you’re effectively buying 198.8 gallons (as measured at 60º) for the 200-gallon price. If your truck gets six miles per gallon, you’ll travel 7.15 fewer miles down the road, and you’ll pay $4.43 dollars more than you should have (at the March 6, 2008, average price of $3.71 per gallon). At 90 degrees—not unheard of—you’d 14.2 miles fewer down the road and out $8.80.

Then again, it’s only money.

But if hot fuel makes you hot under the collar, visit www.turndownhotfuel.com. The purpose of Owner-Operator Independent Driver’s Associations (OOIDA) Turn Down Hot Fuel campaign is to educate consumers about how selling fuel at temperatures above the standard affects the real cost of fuel. It also provides an avenue for communicating to lawmakers the need for automatic temperature compensation at every retail fuel pump. Without input from drivers this issue will continue to be ignored. It will take a unified voice to bring this issue to Congress and achieve a solution. Visit www.turndownhotfuel.com now to learn more and to find a way to make your voice heard on this issue.