The business of shipping goods is huge. With practically everything we use and consume going via some aspect of the global freight network, the movement of goods is the foundation of contemporary society. A company must rely on freight service owners to distribute its goods unless it is large enough to maintain a fleet of trucks. Even the largest companies rely on specialized freight services for air, rail and sea transportation.
Shippers have a lot to consider as they handle their interactions with brokers and carriers, but they’ve faced particular difficulties in light of the current spike in demand. It’s not just one problem; it’s everything, including issues with insurance compliance, capacity constraints, and changes in freight market prices. Low-profit margins are exacerbated by the industry’s high operating costs, rising fuel prices, tolls, and criminality.
The largest issue is reportedly the scope and complexity of risks that freight companies are ready to accept in exchange for contracts, seemingly without fully considering the financial repercussions if something goes wrong.
These are the issues and dangers that any freight service companies may run against. The good news is that by implementing the appropriate time-saving procedures, shippers can ensure they make the most of their time and try to prevent other hazards.
This article could be helpful if you are thinking of starting a freight service business or if you own one and are struggling with keeping the business from liability risks. There are a couple of ways to keep your company away from these liability risks, and in this article, we shall discuss 7 of them.
- Training and vetting drivers before getting them on the road
Driver education is essential, both in terms of vehicle control and in terms of loading and handling. Drivers frequently lack the skills to load, mark, and identify fragile materials. Drivers frequently fail to set the thermostat at the proper temperature or fail to set it at all for cargo that requires a temperature-controlled environment, such as meat or dairy goods.
Perishables are a major source of worry. Some business owners choose to hire foreign workers who lack official work permits, references, and frequent industry-specific training to save money on pay. You simply wouldn’t know whether that person had a criminal record, making this the ideal time to find out.
So when hiring drivers for your company, ensure they undergo proper training and do not forget to do some background checks to avoid any issues with the law. Ensure they have the right documents and permits to drive across cities and countries to avoid the risk of them being a liability to the company. This is important because the company will be held responsible if the drivers get involved in any legal or other issues.
- Insurance Coverage for carriers
Shippers must ensure that carriers abide by compliance regulations, which are always changing. This necessitates monitoring current carriers, communicating about coverage gaps, and screening new carriers to ensure they have the appropriate insurance.
For every company member, there should be some insurance coverage that protects them in case of accidents or any unforeseen incidents. You should consider covering drivers with life insurance. The company should also have liability insurance that covers both liability and cargo. Contact commercial lines insurance agents to get reviews and answer questions like how do life insurances work and how your drivers can benefit from the policies.
- Get an additional layer of protection
Preload insurance, an additional but essential layer of security that covers full and LTL truckloads, allows shippers to reduce further risk. In this approach, the shipper will still be protected if a carrier cannot pay for lost or damaged goods because of exclusions, a lapse in coverage, or a refusal to pay for the losses.
- Manage and reduce freight claims
Recognize that once the shipment is loaded onto your truck and the bill of lading is signed, you, as the driver or carrier of the shipment, are solely responsible and liable for the shipment. You will be responsible for paying for any damage, rejection, or undelivered load once it is on your truck, including parts missing, rejection for any reason, or theft while traveling. Since you were the carrier and it was in your care, the cargo will be the responsibility of the owner-operator of the truck or the trucking company.
To protect yourself and the drivers from liability, it is in the interests of the carriers to record every stage of the procedure and gather as much information as possible to avoid false claims.
- Always cross-check every document and paper before hitting the road
Although it may seem simple, shippers must be careful to obtain the correct signatures. If rates or terms are ever contested, an unsigned document could cost them dearly. By automatically collecting the agreement with each carrier and enabling the tracking of revisions of agreements across several years, an automated onboarding experience can streamline this process.
- Understand what you are taking up with each client
Avoid being pushed into quickly signing contracts without fully comprehending the risk to your company, reputation, and employees. As an illustration, a freight business agreed to transport specialized equipment for a client. In a rush, the deal was signed, and an accident happened en route. The business will be held accountable, and the loss may force them out of business if your insurance does not cover the cost of the damaged items.
- Maintain competition despite capacity constraints
Any shipper could run into problems due to an increased demand, but the issues are magnified when there are capacity shortages. Simply put, there aren’t enough drivers or carriers to fulfill the demand, which makes it even more important for shippers to find additional carriers as soon as possible to help with capacity constraints.
To maintain ongoing customer relationship nurturing, a reliable carrier network is essential. Here, cutting-edge technology is essential. When shippers have more freight than their present network of carriers can handle, a good load board can help them maintain their competitiveness.
