Check Call: New year, new schemes

In this edition: Stopping freight fraud in 2024 and all eyes on Mexico in the new year.

Mary O'Connell

10 months ago

people gathered around a desk of computers. Check Call news and analysis for 3pls and brokers

New year, new schemes. Kind of like new year, new me, but for shady characters who are hoping to level up their games this year. Fraud is a billion-dollar industry and it’s truly just a matter of when it happens to you. For brokers looking to not fall victim in 2024, we’ve got some tips and tricks for you.

Hard passes:

Carriers operating with inactive or revoked authority/carriers operating with newly issued authority.

This one can kind of be OK-ish if you can verify through other vendors or references they’re valid carriers, but ultimately it’s very risky so not the best option.
Obviously if they have a history of being reported for double brokering, sprint far far away.

Excessive or recent insurance changes.

With insurance being one of the biggest expenses for a carrier, sometimes changes help the bottom dollar, but I’d say changing insurance more than twice a year is excessive and worth some follow-up questions and phone calls to validate insurance.

Multiple changes in the owner of the motor carrier number in the past few years.

Once or twice is no big deal. That can happen. But if they’re cagey about why the change happened, hard pass.

Inconsistency.

The same way carriers love consistency from their brokers, brokers should look for that in their carriers, not only in their performance but in their records. Does Federal Motor Carrier Safety Administration data not match what you were told? Hard pass. Does the address given show a random dentist’s office or a P.O. Box with six other LLCs registered to it. Double hard pass.

Pushy verifications.

If they don’t want to wait to go through carrier verification processes and “promise to do it after the load — they’re good for it; don’t worry,” how about no.

Negative reviews.

Obviously take this with a grain of salt — the same way carriers take negative reviews of brokers with a grain of salt. Know when a complaint is valid versus when someone who had something go wrong loses it in the comment section on the internet. You can always tell which are loose cannons and which are mostly legit.

The most important thing is just to trust your gut. If something seems too good to be true, it is. If carriers are fine at first but become cagey when you ask follow-up questions, maybe keep asking or hang up the phone. Most carriers have no problem answering professional questions about their business — well, most legit carriers at least.

Market Check. This week’s SONAR market is the behemoth in Southern California, Ontario. Capacity is loosening a little, a trend that should be seen in most markets as January gets into swing. January traditionally is a quiet time for the freight markets, especially following peak retail season, and this year it’s anticipated to be one of the bleaker Januaries in terms of freight rates. Outbound tender volumes are down 6.3% week over week, and outbound tender rejections are down 160 basis points in the same time frame.

Some volume will return to the market as everyone returns from the holiday, but it’s likely to remain a quiet January. Take care of carrier relationships and work with them when possible on rates as there is far too much supply in the market compared to demand.

Who’s with whom? Everyone’s favorite near and offshore staffing company, Lean Solutions Group, has sets its sights on Mexico. Given the rise of nearshoring in Mexico and companies looking to set up shop quickly, Lean Solutions’ doubling down on Mexico is a natural progression. It’s hard to find a 3PL or freight brokerage that hasn’t used the service, and as more shippers expand into Mexico, not everyone can afford to set up offices there.

In a FreightWaves article by Noi Mahoney, Daniel Agamez, Lean Solutions Group senior vice president of operations, said, “We see Mexico as a land of opportunity as huge companies have had major success operating out of Mexico. The Mexican market itself has strong ties and relationships with the U.S. business industry; therefore, we now offer our clients the opportunity to have their logistics workforce located in the same country, offering the possibility of direct logistics management where their supply chain begins.”