Top 3 Red Flags of Freight Shipping Companies and How to Avoid Them
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Freight shipping companies can have a huge impact on your supply chain, which means you need to ensure that whoever you partner with is capable of saying what they can do and always doing what they say.
Any breakdown in this process can lead to a decline in profits and reputation.
Previously, we discussed some important factors to consider when choosing a shipping company.
Now, it’s time to take a look at some of the common red flags that should tell you when a company may not be the one you want to go with. We’ll also suggest some simple things you can do to avoid these potential issues.
1. Rates that Are Clearly Too Low
If something is “too good to be true,” assume that you have discovered an inescapable fact about the quote you just received.
There are some fraudulent companies out there that will say they will accept a load for a significantly reduced rate just to get you to sign on. Their prices will be extremely tempting – especially compared to what all the well-established companies charge – and they’ll have some kind of explanation or gimmick for why they can make this offer.
However, the simple fact is that the costs of fuel and the increased rates for professional drivers continue to go up, leading to increased prices on every front. This has impacted everyone in the supply chain.
If you happened to stumble across the one company in the entire country that doesn’t seem to be affected by these increases, then chances are you really haven’t.
All you’ve done is stumbled across someone who is attempting to run a scam.
How to avoid this issue:
Don’t just accept the first quote you’re given. Take the time to field a few quotes because, at the very least, this should give you a good baseline from which you can judge every offer.
Don’t just assume that some wonderfully low price is close to the industry standard and you’re just getting a great “sign on” deal.
If you see that a quote is excessively lower than the baseline, you may have reason to question their sincerity or their ability to complete the delivery.
2. Fuel Advance Fraud
This is, unfortunately, something that is all too common in the industry. It’s a type of fraud that involves one party claiming to be a carrier and “selling their shipping services” to unsuspecting producers. This party will then turn around and try to sell the work to an actual carrier for a higher price – higher than the producer agreed to pay.
In order to accomplish this, the fraudulent party must obtain documents from actual carriers and then alter them to make it look like they are representing a legitimate company.
Once the load is picked up, the scammer will fax the necessary information from the actual company to producer and requests a fuel advance on the load – which they will then take and run away, leaving everyone else with the actual financial burden and goods that aren’t going anywhere.
How to avoid this issue:
Always check the credentials of the shipping company you work with. Make sure that the DOT/MC number match the numbers that your carrier has submitted. Take the time to verify any contact information you are given, because the existence of a website is not enough to prove that a real company exists behind your shipping services quote.
Fuel advance scams also try to take advantage of your need for speed. They’ll pray on your anxiety over on-time shipments and claim that the driver has no money and won’t be able to complete the delivery without a fuel advance. So, take your time, verify your data, and don’t listen to these claims.
3. Too Many or Too Few Reviews
While a professional freight shipping company isn’t going to have online reviews in the same way that businesses in the hospitality, medical, or consumer industries do, you should be able to drum up some legitimate reviews for any shipping services.
You can check their website for customer testimonials or explore their social media presence or even see if Google has a rating for the company.
If you can’t find any reviews at all, this could indicate that they simply don’t have the experience or the successes for customers to talk about.
On the other hand, if you find nothing but a stream of 5-star reviews that are posted by someone with a loose grip on the English language and seems to repeat the same sentence over and, then there may be some issues going on.
How to avoid this issue:
Take the time to seek out reviews for the company you are going to work with. Better yet, ask the carrier if they can give you a list of companies they’ve worked with in the past and if they can show you some case studies involving previous clients.
Your shipment is too valuable to take any risks with your intermodal transportation services. Keep an eye out for red flags just like these and make sure that your cargo gets safely and efficiently from your location to its final destination.