Can a carrier sub-contract loads?

[Mandilon]

By jonboy, different thread: -I'm going to roll out power only, and see what happens dragging some vans around for other people...

Senario question to all (any brokers around?):

We specialize in hauling From Van Horn (transfer point), Texas to California (and visa versa). We have (or lease) dry vans and reefers in Laredo, Houston, Shreveport and Oklahoma City with terminals in San Antonio, Dallas And Los Angeles.

Would brokers/shippers/receivers allow us to commission (sub-contract) someone else to 'partially' move such load to our terminals that our regular associates could continue with said loads to their final destinations (California)?

Sub-contractor would be paid COD and would have their own authority.

THX & Keep on trucking!

[Joymax_Trans2]

If you have your own authority you can contract another carrier to move those loads. The contract between carriers is called "Trip Lease". The carrier would be running under your authority temporarily for those loads. I have a copy of a contract if you are interested. PM me.

[rank]

Would brokers/shippers/receivers allow us to commission (sub-contract) someone else to 'partially' move such load to our terminals that our regular associates could continue with said loads to their final destinations?

some would call it double brokering. may not load you again. may not pay you.

[Joymax_Trans2]

Check this web site regarding double brokering and trip leasing.
http://www.carrier411.com/doublebrokered.cfm

[pepe4158]

Say Joy...Ive heard this term used before on, 'trip leasing,' to get around having a broker's license....hmmm when I called OOIDA n asked, they seemed to be saying it isnt what thats definition is intended for, but maybe I missunderstood them......cuz they have to be carefull on how they dispense legal advice not being attornies.

These definitions were taken from:
http://www.window.state.tx.us/taxinf...htm#trip_lease

Owner-Operator Contract
An owner-operator contract is an agreement between the owner of an interstate motor vehicle and a motor carrier. Under the terms of the contract, the owner/lessor gives control of the vehicle to the motor carrier/lessee, and the lessor either provides a driver or drives the vehicle for the lessee. The contract must be for more than one trip.


--------------------------------------------------------------------------------

Trip-Lease
A trip-lease is the lease of a motor vehicle between a person and a motor carrier on a single-trip basis. The motor vehicle is driven by the lessor or an employee of the lessor.



What I am getting at is this would be a clear case of double-brokering....NOT trip leasing, and I think you HAVE to have a brokers MC# to do it, but I am sure Load-it or G-man would know way more on this subject.

[GMAN]

Are you talking about leasing on contractors under your authority to pull your trailers to your terminals or only those with their own authority picking up your trailers at your shippers and/or from brokers? Would your drivers still deliver the loads?

[Mandilon]

THX 4 the input guys!

GMAN:

Are you talking about leasing on contractors under your authority to pull your trailers to your terminals or only those with their own authority picking up your trailers at your shippers and/or from brokers? Would your drivers still deliver the loads?

This would be for 'as a situations arise' cases. Let's say we had a terminal in San Antonio and trailers at the other aformentioned locations and would rather partially 'trip lease' (double broker?) the other locations.

Said power units would have their own authorities and do these trip leases on occassion.

Our 'regulars' would deliver to the end destination.

THX guys!

[Joymax_Trans2]

Here's the diifference between double-brokering and trip leasing as I understand it. If you are a motor carrier and your customer "The Shipper" has some loads that need to moved. The motor carrier can have another motor carrier trip lease with them to move that Shipper's freight. The trip lease motor carrier would not be on the motor carrier's insurance policy but their insurance company would have to be notified. The 2nd motor carrier is running under the 1st motor carrier's authority. This is not double-brokering because both motor carriers are running under one authority.

Double-brokering would be a contract between the broker and motor carrier then the motor carrier contracted out the load they were suppose to move to that motor carrier without running under the 1st motor carrier's authority.

[pepe4158]

Here's the diifference between double-brokering and trip leasing as I understand it. If you are a motor carrier and your customer "The Shipper" has some loads that need to moved. The motor carrier can have another motor carrier trip lease with them to move that Shipper's freight. The trip lease motor carrier would not be on the motor carrier's insurance policy but their insurance company would have to be notified. The 2nd motor carrier is running under the 1st motor carrier's authority. This is not double-brokering because both motor carriers are running under one authority.

Double-brokering would be a contract between the broker and motor carrier then the motor carrier contracted out the load they were suppose to move to that motor carrier without running under the 1st motor carrier's authority.

K...this is the way I understood it as IOODA explained it to me, you cant triplease your freight itself...thats brokering, and you have to HAVE to have a brokers MC #
You can however trip lease your EQUIPTMENT as a carrier....hmmm if its a loaded trailer Im not sure if thats kosher, but maybe G-man or load it would know for sure?

[roadranger]

Don't know how "legal" it is - but up here in the Northeast smaller carriers swap freight back and forth all the time. If you only have 3-5 trucks you have to have some way of keeping your customers happy when they need an "extra" run or whatever. The company I work for even pulls an occasional container for someone even though we aren't a registered container carrier. The yards just want to know who you're pulling for and see the paperwork - don't care what it says on the side of your truck! Never run into a regular shipper that cared either...

[GMAN]

This is what the Federal regulations state about your question.



§371.2 Definitions.

(a) Broker — means a person who, for compensation, arranges, or offers to arrange the transportation of property by an authorized motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.

(b) Bona fide agents — are persons who are part of the normal organization of a motor carrier and perform duties under the carrier’s directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.

(c) Brokerage or brokerage service — is the arranging of transportation or the physical movement of a motor vehicle or of property. It can be performed on behalf of a motor carrier, consignor, or consignee.

(d) Non–brokerage service — is all other service performed by a broker on behalf of a motor carrier, consignor, or consignee.

[Mandilon]

Check this web site regarding double brokering and trip leasing.
http://www.carrier411.com/doublebrokered.cfm

"What protection does a broker have against being held liable for negligent hiring of a trucker when the carrier selected by the broker double brokered or gave the load to a different trucker, without the broker's knowledge or consent, and the hired trucker caused an accident?"

If the broker diligently checked the motor carrier's FMCSA safety record, safety rating, registration and insurance filings before hiring it, the broker probably would be protected. A plaintiff's attorney, however, would probably allege that the broker failed to be assured that the carrier would not substitute a different carrier with an unknown safety record.

How long does it take to check-out a carrier's credentials and safety record? Of course we wouldn't just commission anyone out of the sky for such an important and delicate job.

We're not the risk takers of younger years. We'd rather go at least 90% by-the-book.

With the following link I can clearly see the potential problems with this scenario: http://www.inboundlogistics.com/arti...heck0705.shtml

[GMAN]

You can check out a carrier in a few minutes by going to the safer system. You can check to see if they have authority, insurance, safety record, length of time in business, etc., Most brokers will have the insurance company to fax current policy information directly to them to insure that they have current information. Some load boards have rating systems available for both brokers and carriers. I recently hauled a load from a new broker who called because of my rating.

[jonboy]

Every contract I've signed so far says "no subcontracting".

I don't know how you could use another carrier to move that load without them being a "subcontractor". You could however, move it with another truck and an "employee", which would be operating under your authority and insurance.

The problem with subcontactors is, the broker hasn't verified their authority and insurances. I don't blame them for disallowing it.

If there was a loss, it would be more complicated with three parties involved. You know how that old blame someone else thing goes.

jonboy

[Mandilon]

You could however, move it with another truck and an "employee", which would be operating under your authority and insurance.

Seems like the above OR having an 'in-house' broker (which we eventually will) double brokering would be the way to go.

Having idle equipment and standby drivers would seem pretty inefficient and inefficiency is what we're trying to keep away from.

We need to figure this one out since there are enough loads heading to the aformentioned region from California but not enough loads from any one or two of our mentioned points going to California.

THX guys