RFX Blog

Risk Assessment Tips for Freight Brokers

August 22nd, 2014

Photo Credit:  Wasim Muklashy  |  Flickr Creative Commons

Photo Credit: Wasim Muklashy | Flickr Creative Commons

One of the challenges that logistics providers face is risk assessment.  In transportation, we know that freight claims are inevitable, but we do everything we can to take preventative measures and understand the pitfalls of a logistics operation.  Particularly with freight brokers, being one step removed from the truck and never touching the freight, assessing risk is especially critical.  Here are some risk assessment tips for freight brokers:

Understand Each Commodity – Possibly the most important element of risk assessment is one’s ability to understand the commodity being shipped.  Take the time to understand the sensitivity levels of your cargo.  Are you moving fresh strawberries?  Or are you moving cinder blocks?  Pay particularly attention to any agricultural commodity, as these are typically exempt commodities that don’t fall under the same regulations as other goods.  Claims for damage for produce or fresh poultry are typically handled differently than other products and the risk level is generally high.

Another variable related to commodity-type is value.  How much is your shipper’s product worth?  40,000 lbs of seafood is worth a lot more than 40,000 lbs of candy, for instance.  The value of these products can also change with the seasons because of their availability or lack thereof.

Broker-Carrier Relationship – It seems that we cannot say this enough: The most successful freight agents are those who take the time to build and maintain quality relationships with motor carriers.  This is reinforced in claims or loss situations. Typically, motor carriers that work well with freight brokers and maintain a strong business relationship are more likely to be proactive in OS&D or claims situations. Having a mutual respect for one another and maintaining a great working relationship goes a long way when things go wrong.  If both parties feel indebted to the other, you will be more willing to work together to solve a problem.  In assessing your level of risk, take the time to review your carrier-base.

Claims History – Review your history of claims by customer, carrier, commodity, lane and season.  Understand where the pitfalls lie.  Maybe you worked with carrier that was not a good communicator in a previous claim situation, or perhaps you have continuously received claims on loads with the same receiver, but not necessarily the same shipper.  Knowing what to look out for by being aware of previous claim situations is another way to assess your level of risk before a loss occurs.

What is your company doing to anticipate and assess risk in your transportation operation?  We’d love to hear from you.  Tweet us at @rfxinc

 

Posted on August 22nd, 2014 in business strategy, freight agent, Freight Agent Broker, Freight Logistics, motor carrier, Trucking Industry, Trucking Tips