Innovative Worldwide Logistics, Inc.
3948 Fountain Valley Drive
Knoxville, Tennessee 37918
Phone: 865-922-2447
Fax: 865-922-2493
License #: MC 356726 B
A freight broker is anyone who "arranges for transportation for compensation." 1
Correctly seen, a freight broker, like an insurance agent, realtor, or stockbroker brings together willing buyers and sellers, and is not a principal in the transaction. A freight broker is responsible for retaining licensed motor carriers whose services are designated to meet the specific needs of their shipper. A freight broker also has a duty to ensure that the motor carriers utilized hold adequate cargo insurance to assure the shipper is protected against loss, damage or delay. To comply with this duty, freight brokers utilize a Broker-Carrier agreement that require warranties that the carrier maintain cargo insurance and provide certificates of said insurance.
Regarding liability for loss, damage, and delay, a freight broker is not bound by the same regulations as a freight forwarder or motor carrier. In the scheme of interstate transportation, motor carriers and freight forwarders are liable for the destination market value of any goods loss, damage, or delay in transit pursuant to the Carmack Amendment.2 On the other hand, freight brokers are not subject to the Carmack Amendment 2 and have no statutory liability for loss, damage, or delay.3 In the absence of negligent entrustment, a freight broker is not normally involved as a party litigant in a cargo claim dispute, although as an accommodation, the freight broker may assist the shipper at their request and expense with filing freight claims.
Since motor carriers under the Carmack Amendment 2 are subject to strict liability for loss, damage, and delay, a shipper is more than adequately protected if the freight broker warrants that the motor carriers retained are legally obligated to meet this standard and have appropriate insurance and authority on file.
1 See 49 C.F.R. §371
2 See 49 U.S.C. §14706
3 See Golden Triad Carriers v. Paco American Corp., 1990 Fed. Carr. Cases at 83,515; Custom Cartage v. Motorola, 1999 W.L. 89563 (N.D.I11. 1999); American Home Assurance Company v. Forward Air, 96-4463 (11th Cir. 1997).
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