Auto Transport Terms and Information
Educational Information on Auto Transport
Provided here are the definitions as established by the Department of Transportation as well as the differences in legal liability provided by each service provider type. The document provides strengths and weaknesses along with legal court decisions and industry expert opinions.
Auto Transport Brokers
DOT Definition of Auto Transport Brokers
“A company that arranges for the truck transportation of cargo belonging to others, utilizing for-hire carriers to provide the actual truck transportation. However, the Broker does not assume responsibility for the cargo and usually does not take possession of the cargo”.
Auto Transport Broker Advantages
Brokers are positioned to offer cheaper prices due to the fact that responsibility for shipment liability is not included in their price.
Auto Shipping Brokers Disadvantages
Transportation Law, second edition, (1975) page 218, states, “A Broker acts as an Agent for both parties”. The implication is a Broker is not an unbiased advocate on behalf of the Shipper. The Broker, at best, would simply try to “mediate the settlement of related loss and damage claims”.
The US Supreme Court ruled in 1949 (Chicago, Milwaukee, St Paul & Pacific Railroad Company Versus Acme Fast Freight, 336 U.S. 465, 467-68, 93 L. Ed. 817, 69 S. Ct. 692 (1949)) referring to non-carrier shipper’s-agents, “not issuing a Bill of Lading, is just an agent, with no responsibility for the physical state of the cargo”.
In it’s opinion the Supreme Court quite properly defined a non-carrier shipper’s-agent as a “travel agent” for freight. The public commonly accepts the imperative that a “travel agent” which books your passenger flight is not responsible for your lost luggage. Once travel arrangements have been made, the airline issues a ticket to the passenger and becomes responsible for all aspects of carriage to destination. Likewise for the shipper’s-agent, the responsible Carrier agrees to issue a Bill of Lading, takes possession of the commercial cargo, and becomes responsible for all aspects of carriage to destination. The Federal court now restates the old, but sometimes forgotten, rule that this same basic principle applies to cargo.
A Broker simply facilitates the movement of cargo, secures cargo space, gives advise on governmental licensing requirements, and arranges to have the cargo reach final destination. Unlike a Carrier or Freight Forwarder, a Broker does not issue a Bill of Lading, and is therefore not liable to a shipper for anything that occurs to the goods being shipped. See (United States versus American Union Transport, 327 U.S. 437, 442-43, 90 L. Ed. 772, 66 S. Ct.644 (1946) [*8]) stating that non-carrier shipper’s-agents “assume no responsibility for the transportation of goods”. As long as the Broker limits their role to arranging transportation, it will not be held liable to the shipper.
Auto Carriers
DOT Definition of Auto Carrier
A company that provides truck transportation. There are two types of motor carriers, private carriers and for-hire carriers. To operate as an interstate motor carrier, either as a private or as a for-hire carrier, a company must register with the Federal Highway Administration by filing a form MCS-150.
A Carrier is liable for all loss, damage, and delay with the exception of act of God, act of public enemy, act of a public authority, act of the shipper, and the inherent nature of the goods. Carrier liability is specified in the terms of the Bill of Lading.
Auto Carrier Advantages
Carriers offer the potential for cheaper rates and faster transit times, based upon equipment availability – if you are going where they are going, when they are going.
Auto Carrier Disadvantages
Customers shipping directly with a Motor Carrier limit themselves. Issues such as geographic region, equipment availability, equipment utilization, and return on investment will impact the ability or willingness of a Carrier to respond to a customer’s specific need. Individual Carriers are unable to provide competitive service into all traffic lanes and geographic regions.
Transportation Intermediaries Association Counsel, Paul Lamboley, states, “market practices today tend to blur the legal distinctions…Carriers with increasing frequency “broker” traffic tendered to them as Carriers”. Just because a customer does business with a Carrier does not mean they will receive service from that Carrier.
Freight Forwarders
DOT Definition of Freight Forwarding
A company that arranges for the truck transportation of cargo belonging to others, utilizing for-hire carriers to provide the actual truck transportation. The Forwarder does assume responsibility for the cargo from origin to destination and usually does take possession of the cargo at some point during the transportation. Forwarders typically assemble and consolidate less-then-truckload (LTL) shipments into truckload shipments at origin and disassemble and deliver LTL shipments at destination.
Freight Forwarding Advantages
According to Transportation and Logistics, a Freight Forwarder is legally treated as a Carrier of a shipment. It is responsible to the shipper or consignee for the load. Under the Interstate Commerce Commission Termination Act (ICCTA), Freight Forwarders once again have to register with the Federal Highway Administration”. The shipper receives all the legal protection from a Freight Forwarder as they would receive form a Carrier. However, a Freight Forwarder does not face the same restrictions commonly faced by Carriers.
Freight Forwarders have the luxury of tapping into the resources and expertise of the leading service providers within their industry. Customer service is enhanced by the flexibility afforded by a myriad of approved service providers. The focus of the shipment is based entirely on customer needs rather then return on investment and equipment utilization. The result is the customer has greater control over, and input into, the scheduling and shipment of their vehicle.
TNT Transport Services maintains high standards and rigid qualification criteria for all TNT authorized service providers. Performance is monitored and evaluated on a continual basis. TNT targets each specific traffic lane that corresponds to the individual strength of the service provider.
Freight Forwarding Disadvantages
Freight Forwarders are unable to offer the appearance of cheap prices based upon the additional services they offer above and beyond that of Brokers.
