Freight Broker Due Diligence: Vetting Carriers the Right Way

As a freight broker, your reputation depends on the carriers you work with. A single accident or cargo theft involving a poorly vetted carrier can result in lawsuits, lost customers, and business failure. Proper due diligence isn't just best practice—it's essential for survival in the brokerage industry.

Why Carrier Vetting Matters

Under vicarious liability principles and various state laws, freight brokers can be held legally responsible when carriers they hire cause accidents or fail to deliver. Courts have increasingly held brokers accountable for negligent selection of carriers, making proper vetting a legal imperative.

Beyond legal exposure, working with unreliable carriers leads to:

• Cargo claims and theft losses
• Service failures that damage shipper relationships
• Increased insurance premiums
• Regulatory scrutiny and potential fines
• Reputational damage in a word-of-mouth industry

The Essential Carrier Qualification Checklist

Every carrier in your network should pass these verification steps before you tender a single load:

1. Operating Authority Verification

Use the FMCSA SAFER System or Trucking Record to verify this information instantly.

2. Insurance Verification

Confirm the carrier maintains adequate insurance coverage:

• Primary Liability (BIPD): Minimum $750,000 for general freight
• Cargo Insurance: Typically $100,000+ depending on cargo value
• Active Policy Status: "On file" is not enough—verify current dates

Always request a Certificate of Insurance (COI) and verify it directly with the insurance company. Fraudulent COIs are common in the industry.

3. Safety Record Review

Analyze the carrier's safety performance:

• FMCSA Safety Rating: Satisfactory preferred; Conditional requires caution; Unsatisfactory = do not use
• CSA Scores: Review all seven BASICs for elevated percentiles
• Crash History: Number of crashes in past 24 months
• Out-of-Service Rates: Compare to national averages (vehicle: 21%, driver: 6%)

4. Identity Verification

Carrier identity theft and double brokering are epidemic in the industry. Verify:

• The person calling matches authorized contacts on file
• Phone numbers trace back to the carrier's registered location
• Email domains match the company (not generic Gmail/Yahoo)
• Bank account information matches company records
• Driver's CDL is valid and matches the carrier's driver list

5. Equipment Verification

Confirm the carrier has appropriate equipment for your freight:

• Fleet size matches the scope of work
• Equipment type is correct (reefer, flatbed, dry van, etc.)
• For temperature-controlled freight: verify reefer unit specs
• For hazmat: verify proper endorsements and equipment

Ongoing Monitoring

Carrier qualification isn't a one-time event. Best practices include:

1. Regular Re-verification: Check authority and insurance at least quarterly
2. Safety Score Monitoring: Set alerts for significant score changes
3. Performance Tracking: Track on-time delivery, claims, and service issues
4. Insurance Expiration Alerts: Monitor policy renewal dates

Documentation Requirements

Maintain comprehensive records for every carrier in your network:

• Signed Carrier-Broker Agreement
• W-9 form
• Certificate of Insurance (current)
• Operating Authority documentation
• Safety record screenshot at time of qualification
• Contact verification records

Retain these records for at least 3 years after your last transaction with each carrier.

Technology Tools for Carrier Vetting

Modern brokers use technology to streamline due diligence:

• Carrier Monitoring Platforms: Automated alerts for authority/insurance changes
• TMS Integration: Built-in qualification checks before load assignment
• Identity Verification Services: Phone/email validation against FMCSA records
• Public Databases: FMCSA SAFER, SMS, Trucking Record

What to Do When You Find Problems

Carrier Fails Initial Qualification

If a carrier doesn't meet your standards, decline to work with them. Document the reason and keep the record in case they apply again.

Existing Carrier Develops Issues

If a carrier in your network shows deteriorating safety scores or loses insurance:

1. Stop tendering loads immediately
2. Notify the carrier of the issue
3. Give them an opportunity to correct (with deadline)
4. If not corrected, remove from your approved carrier list

Suspected Fraud

If you suspect identity theft or fraud:

1. Do not dispatch any loads
2. Verify with the real carrier directly
3. Report to FMCSA and local law enforcement
4. Alert industry associations and load boards

Build Your Carrier Network the Right Way

Proper carrier vetting protects your business, your shippers, and the public. While it requires time and resources, the cost of negligent carrier selection is far higher.

Start your research with comprehensive carrier data from official sources.

Research Carriers Now