While doing the research for this blog article, I was more than a little surprised by the severity of the fines imposed for things like 1099's. Not just for filing them late, but also for adjustments. Therefore, not only do you have to be on time, you must be accurate or face fines. The fines are not exactly cheap. If you make corrections within 30 days, it is $15 per 1099. Between April 1 and August 1, that goes up to $30 per 1099, and after August 1, it is $50 per 1099! Depending on the size of your brokerage, and the number of carriers you deal with on an annual basis, this could get to be quite an expense.

Taxes are certainly another instance when having a reliable, complete, and integrated brokerage system can save you time and money, and provide peace of mind. Whether you are trying to manage your business accounting manually or on spreadsheets, this type of itemization and report building is an enormous investment in time, and the result may be riddled with errors in data entry or incorrect calculations.

There are several stand-alone accounting solutions available which help, but for a freight brokerage, this means re-entering information into each separate module and risking data entry errors in each shipment's entries. TruckMaster's freight brokerage solution provides single entry, easy to follow data flow. You never have to enter the same data twice. Your 1099 forms are simply printed and ready to send. This means there is very little extra work at year-end, and no worries.

If you have found yourself stressed over filing tax forms this year, perhaps it is time to take a look at what TruckMaster's Freight Brokerage software can do for you.

More Info:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

http://www.ehow.com/about_4743118_reporting-requirements-small-business.html

http://www.mckenzielaw.com/INDEPEND.html

Kurtis Brown
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

The question often arises regarding the legality of accepting a load from a customer and giving that load to another broker for assistance in arranging transportation. Yes, co-brokering is legal and it can be advantageous to have another broker help you cover a load, so long as your contract with the customer does not prohibit co-brokering. It can be beneficial in proving to your customer that your brokerage has resources available to fulfill all of their requests.

In a co-broker relationship, you are there to service a specific need of your customer. Both parties understanding each others functions and responsibilities you are able to use each others resources in order to serve your customer in a satisfactory way and also to make a profit on a transaction that you might have otherwise refused. After all, you're in business, to profit. If you don't serve your customer someone else will.

Double brokering on the other hand is a risky situation. In many cases double brokering loads does in no harm, other than reducing profit margins and slowing payments. It does become a real problem, however, when fraud is the intent from the beginning.

There are a lot of fraudulent beings out there. The most common one typically involves an imposter motor carrier who takes a load from a legitimate broker and then re-posts the load on the internet load board at an inflated rate to lure in an unsuspecting carrier to transport the freight. The imposter has no intention of ever paying this carrier they just wait for the evidence of a completed shipment from the true carrier, then the imposter submits its own invoice to the first broker, collects payment and disappears leaving the carrier who actually hauled this load high and dry.

There are ways to protect yourself:

1. Make sure the phone and fax numbers match their authority.
2. Make sure insurance certificates come only from the issuing Insurance Company.
3. Dispatch the trucks yourself, talk to the driver and get as much information from them as possible.
4. If you have a relationship with your shipper, ask them to verify the name on the truck.
5. Don't give advances.
6. Caller ID. It’s a good way to double check the information they are telling you.
7. Check the FMCSA safety record, safety rating, inspections, and anything else that will help you confirm they are who they say they are.
8. Ask for references and check them out. It may save you a lot of time and money.
9. If you have a contract prohibiting the substitution of carriers and/or double brokering without the broker's written permission, be sure you do the follow up. Make sure the carrier did as they said they would do.
10. There are many carriers who also hold a broker's license under the same name. Make sure they are hauling loads on their own trucks and not brokering them out.

There are lots of fraudulent people in the world today. You need to protect your company and your customer. Be sure who you are dealing with and make sure you have all of their credentials so that you are not inviting financial disaster.

Using TruckMaster's Freight Brokerage Software will help you manage your business and keep track of the things that make a world of difference to your business. Contact us today for a free demo.

Donna Bratton
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

With the new FMCSA Safety Rating measurement system (CSA 2010), which could update carrier safety rating monthly, your "due diligence" practices regarding carrier safety will become more involved and your company’s safety procedures will need to be checked and updated soon.

Several states have already implemented the CSA2010 monitoring process, and by the middle of 2010 all states will be required to it. At that time, the Safer and SafeStat programs will be replaced by CSA 2010. Not only will the carrier be rated, but also the drivers. All violations and inspections will update the carrier and driver safety ratings monthly.

You need to start preparing your brokerage company for this new program. You will need to implement a regular carrier safety update procedure so that when you book a load on a carrier you can be certain that the carrier has a good safety rating on the new CSA 2010 webpage.

Failure to ensure you are brokering only to safe carriers could leave your company liable, just as CH Robinson was found liable. Even if the CH Robinson verdict is overturned on appeal, there have been other recent jury verdicts that ruled against brokers that do not practice "due diligence" in selecting their carriers. "Schramm versus Foster" is one example of a "due diligence" court case involving brokers and 3PLs.

Do your homework. Update your safety procedures. Do not leave yourself open for potential, company destroying, lawsuits.

A good brokerage software package can make monitoring your carrier safety and insurance files much easier. If you do not have software or are not satisfied with your current software, contact us today for a free demo of TruckMaster Freight Brokerage Software.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

Here are a few thoughts:

Accessibility

Your freight brokerage software should be server based, your agents should be able to access it via the internet from their home or office computers. Stay away from "solutions" where each of your remote locations has its own server, and a "dump" has to be completed at an interval to sync the data.

See if the software provider has an ASP or co-hosting option. ASP typically encompasses a setup charge, then a low monthly fee, rather than a software purchase. Co-hosting is where they host the server you purchase for you for a monthly fee. This eliminates the need to maintain the server, or have a high bandwidth internet connection.

Carriers should have a secure web site that they access to view loads you have available, request them, enter equipment statuses, submit load documentation, invoice you for loads they’ve delivered, and the like.

Likewise your customers should have a secure web site that they can access to tender you loads and view equipment / load statuses.

Connectivity

Your freight broker software should have full EDI send and receive capability, meaning at minimum transaction sets 204 (Load Tender), 990 (Response to Load Tender), 214 (Carrier Shipment Status), and 210 (Carrier Freight Invoice). It should not require you to utilize a VAN (Value Added Network, who charges a transaction fee), but allow FTP or emailed transactions.

Not only should you be able to accept loads from your customers via EDI, you should also be able to tender loads to your carriers. Careful on this one – many software packages are only able to receive 204s, not tender them.

Ease Of Use

The truck brokerage software should be intuitive enough that new agents you bring on need limited training before they can start producing revenue for you. This is an often overlooked part of the software search, but is probably one of the most important. Make sure there’s a decent manual available (preferably integrated into the software itself), and contact references to make sure that customer support provided is prompt and knowledgeable.

Flexibility

Your truck broker software should have an upgrade option available to track leased/owned assets. Who knows what the future holds, and having to scrap your existing system to bring on a couple leasers is an expensive adjustment.

Ensure the freight brokerage software is more than just a database. It should function as another group of employees, constantly and tirelessly monitoring load statuses, carrier qualifications, and other criteria your agents should not have to do themselves.

Stability

Ensure the freight brokerage system is available 24/7, check the company’s references to verify any claims the software provider makes to this effect.

Make sure the company has been around for awhile. I couldn’t count on both hands the number of companies we have dealt with that have entered and exited the market in the span of a year or two.

In short, a little more homework prior to the purchase will pay off in spades in the long run. Check out TruckMaster's Freight Brokerage Software for all of the above, and of course much more.

Greg Dodson
TruckMaster Solution Provider
TruckMaster Logistics Systems, Inc.
TruckMaster Your Freight Brokerage™

Even with a strong carrier base and a strong customer base, if you or your employees are hard to get along with these carriers and customers aren’t going to be willing to continue to do business with you. Your strong carrier or customer base will weaken and eventually collapse.

Hiring employees that will work for your business instead of working over your business is the first key. If you could hire someone with great people skills and freight brokerage experience, you would have the ideal situation. So how do you find these people?

Some people think that "retired" truck drivers make great brokers since they know the trucking industry so well. And granted, I know a number of brokers that came from the ranks of drivers who are exceptional brokers. But generally, a driver is always going to think like a driver and that’s not in the best interest of a brokerage company.

Some people think that stealing brokers away from the competition is the best way to get good employees. But, in my mind, I have to ask if he left the other guy, how long will he stay here before he moves on to the next company – and takes the freight we have built up with him?

When hiring employees, don't be afraid to ask the tough questions. Ask why they want to come to work for you. Ask what they are willing to do to be successful at your company. Ask whether the money or the customer is the most important thing in a business transaction. Ask if they are dedicated to building relationships with fellow employees, customers, and carriers that will foster continued company growth. Ask all of the questions that will help you assess the prospective employee’s character and work ethic.

Treat your employees with the respect you would like them to show you and your customers and carriers. Whether you pay your brokers a salary, by the hour or by commission, be generous but not to the extreme. Offer benefits you can afford and are appealing to your employees. Discounted health or dental insurance, and 401k matching options are good examples. An auto-renewing subscription to Field and Stream magazine may be your heart's greatest desire, but not necessarily theirs.

Provide your employees with the tools that will help them do their jobs efficiently and correctly. One of those tools is the correct software. Freight Brokerage Software from TruckMaster Logistics Systems, Inc. is the perfect solution to all of your freight brokerage needs. Our Freight brokerage software is easy to use and, at the same time, completely handles all of the tasks required to run an efficient and profitable freight brokerage company. To find out how we can help you be more profitable and more efficient, and have a greater presence in the marketplace, call us at 888-891-9550 or visit TruckMaster on the web. We look forward to showing you how you can be successful too.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

What is a fuel surcharge and how should it be calculated?

It is an accepted practice for trucking companies to charge customers an extra fee that fluctuates with the cost of fuel. Fuel surcharges are calculated as a percentage of the base rate and are added to a shipper’s freight bill to cover the carrier’s added cost of operations. The surcharge is linked to a government-reported, average fuel price and is "indexed" for the carrier, based on an individual company or industry wide ratio of fuel cost to revenue. Surcharges are often defined as charges above normal rates. A fuel surcharge has traditionally been sold as a charge that covers actual additional fuel costs above the benchmark cost included in the freight rate.

Here is a way to calculate your own fuel surcharge.

The average price, minus the Benchmark price, divided by the miles per gallon, gives the surcharge rate, and multiplied times the miles driven gives the fuel surcharge amount you should recover.

A fuel surcharge should be based on the average retail price of diesel fuel in the region of origination, or where you pick up your load, on the date you pick up, or the date of invoice on this load. This average retail price information, collected by the federal government's Energy Information Administration, is updated every Tuesday. The information is available by phone by calling (202) 586-6966 or you can visit their Web site.

Does a shipper have to pay fuel surcharge?

Past ICC regulations allowed shippers to be charged a surcharge when diesel fuel costs exceeded a certain level. That sunsetted with that agency’s demise and new laws are in the making. Regardless, competitive pressures are resulting in shippers paying surcharges today.

Since the rise in fuel, most shippers are very comfortable with the fact that there is a surcharge. Some have had them in place for many years and others have been putting one in place for three reasons.

First, shippers can clearly see that it’s necessary due to the fluctuation of fuel prices. Second, shippers can sometimes pass rising surcharges on to their customers; and Third, it is possible in many cases to negotiate the surcharge level. As a permanent part of most carriers' tariffs, surcharges rise and fall weekly to help truckers cope with volatile fuel prices. But if shippers would prefer to pay higher overall freight rates, many motor carriers are willing to cap—or even nearly eliminate—fuel surcharges for that shipper's specific account. Although shippers may not like paying the extra money, the surcharges are actually helping to maintain competition in the trucking industry.

There is no federal regulatory enforcement, or involvement of any kind on fuel surcharge. Fuel surcharges must be negotiated individually in contracts between customers and carriers. There is still a major flaw in this process. There is no legal requirement mandating that the fuel surcharges collected from a shipper be passed on to the person who actually paid for the fuel in order for a load to be hauled.

TruckMaster would like to here your thoughts on this issue. How do you think the laws should read?

Please provide us feedback on how what your company thinks about how fuel surcharges should be passed on. It would be interesting to see how everyone out there feels about this hot topic.

Donna Bratton
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

The boss reminded us of the time he was brokering produce in Southern California and sold a truck load of cantaloupe of a specific quality and size to a market place in New York City. When the truck arrived for pickup, the shipping warehouse was out of that quality and size. What did the shipper do? He loaded the truck up with a better quality fruit and sent it on its way. He didn't ask, or even suggest there should be a price change. He merely stated it was his fault so rather than cheating a customer by defaulting on the contract or sending a product of lesser quality; his philosophy was to send a better product. After all, "it doesn’t cost anymore to be magnanimous." He knew the customer would be back for more if he treated him right.

How is your service perceived by your customers? Do you stand out in the crowd of freight brokerage companies as one that cares about doing business the right way? As a freight brokerage company, all you have to offer is service. Here are some questions to ask yourself and your employees:

1. Do our customers and their needs always come first?
2. Are we looking for ways to better serve our customers?
3. Is the service we have to offer going to bring new customers to the table?
4. Is our service such that our customers tell their friends about us?

With excellent software available from TruckMaster Logistics Systems, Inc, offering superior service to your customers is easier than ever before. With information including; customer and customer load information, carrier information, truck location and check call information, available at your fingertips from anywhere in the world you are able to offer excellent service to your customers.

Now, the conclusion of the cantaloupe story, the NYC market was so impressed with the melons they received that they started ordering from this shipper exclusively.

What do you have to offer? Service! Does it cost you any more to be magnanimous? No! Call us at TruckMaster Logistics Systems, 888-891-9550, or visit us at our website and let us show you how you can stand out as a leader in freight brokerage service.

Dale Clark
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

One reason a shipper will choose to use a broker is to avoid adding additional manpower costs to his payroll. As long as the services you are providing are less expensive than additional employees, shippers will continue to use brokers. These services include carrier certification, driver communications, handling claims, and carrier payables. If these are handled well, you will have a satisfied customer that will continue to value your partnership. There may be other services that are unique to your market niche. Be aware of the services that you are expected to provide and do them well.

A second reason to use brokers is to provide a more stable rate structure. For example, if a company uses a broker for a specific lane, his rate will remain fairly constant for that lane. But if he is using many different carriers, the rate will fluctuate drastically. When shippers are planning the cost of moving freight, this ‘rate stability’ is important to them when determining the cost of the product they are shipping. Forward forecasting relies heavily on rate stability.

A final reason that some shippers use brokers is to insulate themselves from lawsuits. If the shipper deals directly with the carriers, he is responsible for insuring all his carriers and their drivers are safe and all the carriers all have cargo and liability insurance. If he uses a broker, however, he has an insulating layer between himself and the carrier. But that means that you can also be involved in possible lawsuits. I cannot emphasize enough the importance of brokers establishing and following proper carrier certification and having cargo and liability insurance. Shippers also need to know your certification policies and insurance information.

Add value for your customers and you will be partners indefinitely. However if you just coast along and do not add much value, soon you will be without customers. If you are too busy to handle the small issues that pop up, soon you will have plenty of time.

Using TruckMaster’s Freight Brokerage Software will help you manage your business and keep track of the small things that make a world of difference to your business. Contact us today for a free demo.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™