You may be a newbie in the trucking industry, and unfamiliar with the concept of the “carrier packet”. In this article, we discuss frequently asked questions around carrier packets.
But before we get to those questions, let’s first look at a brief explanation of what a carrier packet is…
Here’s a short summary to what a Carrier Packet in Truckig entails:
The carrier packet is a collection of different documents that the broker sends to a potential carrier. These documents are meant to help set up the carrier as the approved carrier responsible for hauling freight from the broker to the respective shipper.
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What is a Carrier Packet in Trucking?
Before we even get into the practical details of what this document entails, we believe it’s important to first understand what the trucking business is all about.
Now, trucking is just a business like any other, except for the fact that it doesn’t involve the production of goods. It’s essentially the provision of a service, through the movement of goods from producers all the way down to consumers.
Companies specializing in trucking all have the same goal, and that is to ensure all their consumer needs are met without any delay. And these needs aren’t as complicated as some people might lead you to believe.
You see, all a customer wants is to see his or her shipment loaded and transported as safely as possible to a predetermined destination. And once it gets there, it has to be in the same condition it was, when it left the point of departure.
We don’t know if you’ve noticed this, but we’ve talked about three different parties here. We started by looking at the trucking companies (carriers), the producers (brokers), and the consumer (shipper).
They are all important, as our explanation of what a carrier packet is will be centered on them. And here it is:
A carrier packet is basically a set of documents that a broker delivers to a potential carrier, so that the carrier can fill them out, before returning them to the broker to set them up as the approved carrier.
These documents will help the broker gauge whether or not the carrier has what it takes to safely haul freight to different shippers, and the carrier will know if the brokerage is a legit business.
And that’s the reason why in some circles, the carrier packet will be referred to as a broker packet.
What is Included in a Carrier Packet?
The things that will be included in a carrier packet are the quintessential things that you or anyone would expect to find in any freight agreement. We’ll have the:
- Liability Insurance
- Transportation licensing
- Date of Agreement
- The payment period
- Procedures undertaken for invoicing
- Broker bonds
All the items listed above have to be included in a carrier packet. If any one of them is left out, that carrier packet is not quite a carrier packet.
Take liability insurance, for example. It’s there to ensure your shipment is well guarded against any potential loss incurred during transit.
The broker bond protects the carrier against brokers who always look for ways to weasel out of contracts once the shipment gets delivered, and the payment period acts as a time limit to which that work has to be paid.
We all know the transportation licensing is meant to notify highway patrol or any other law enforcement personnel that the driver behind the wheels has the required license to operate the truck, so we don’t even have to get into that.
The date of the agreement and the invoicing procedures are also self-explanatory.
Is a Carrier Packet Necessary?
In our line of business, you have to work with a carrier packet if you wish to be successful. And that’s why you’ll hear the phrase “Get it in writing,” in every corner you turn to.
To avoid misunderstandings of any kind down the road, it’s your responsibility to ensure all the transactions conducted under the sun are in writing.
In addition, all the terms and conditions have to be clearly defined and signed by all parties involved.
For the record, we’re not implying that the freight and transportation industry is full of frauds or conmen. In fact, a lot of people have good intentions.
The packet is just there to help freight agents and our truck drivers avoid discrepancies by reminding them of their duties, limitations, responsibilities, and rights.
Also, it doesn’t hurt to have proof indicating that on such and such day, there were parties who sat down and agreed to do business together.
Who Drafts Up the Carrier Packet?
We started this off by telling you that the carrier packet is essentially a document that acts as an agreement or contract.
And according to law, the person who’s supposed to draft such a document is the party that’s in a position to propose the terms of the agreement.
In our case, we have three parties involved. There’s the brokerage, the carrier, and the receiver/shipper.
Seeing as this chain starts at the brokerage, the person representing that entity is the guy supposed to draft up the carrier packet.
They are the “person” making the offer, and the other two are the people to whom the offer is being made.
So to keep it plain and simple, it’s the broker who usually drafts up the carrier packet. But they have to involve attorneys who understand how the trucking business works, if they wish to avoid being sued through loopholes in the contract.
Who does the Carrier Packet need to be Sent to?
The “carrier” in the “carrier packet” is trying to tell you that that document is supposed to be sent to the carrier.
It’s a business, and they are the ones who are more exposed or vulnerable in this long chain should anything go south. And trust us when we say, a lot of things can go wrong.
For starters, the broker could decide to change the agreed terms midway through transportation, forcing the carrier to incur the financial burden of loss alone.
We’ve also heard of instances where making payments for delivered goods becomes a problem, and thus, compelling the carrier to explore legal avenues.
These are just a few examples of instances that can be avoided if the carrier packet is in play.
Also, on top of the protection that it normally offers both parties, it also acts as an assurance of sorts.
The thing is, brokers and shippers are always hesitant to work with new carriers because they don’t know how professional they are.
A trucking company could inadvertently cause damage to the shipment that’s under its care, and instead of offering compensation, they decide to blame the broker.
But by offering a carrier packet, the broker will be indirectly trying to find out if the carrier has the insurance required to accept liability should anything happen to the shipment.
How should the Carrier Packet be Transmitted?
There are two ways in which a carrier packet can be transmitted. The broker will either send you a link using their email address, or a PDF document.
If they happen to send you a link, all you have to do is click on it, and it will direct you to their company website. On the website, you’ll be able to fill out the carrier packet at your convenience.
Don’t take too long though. Because if you do, somebody else might beat you to the punch, and you’ll be left looking for a different gig.
Supposing they send you a PDF document, you’ll first download it, and then use a PDF editor software to access its contents.
If you don’t have such a software already installed on your personal computer, you could browse the internet for a free online PDF editor, upload the carrier packet there, fill out everything, and then download a filled-out version.
How do you Set Up a Carrier Packet?
The first page, or cover page, should have the carrier setup checklist. These are basically the instructions to be followed while filling out the carrier packet.
The next page will be the carrier information sheet. This page will ensure you have all your carriers’ information/data, for effective communication.
The information to be added there will include the carriers’ address, Motor Carrier number, Department of Transport number, Standard Carrier Alpha Code, etc.
Next, is the broker-carrier agreement. Now, this is where the legalities come in. It’s essentially a typical contract, with all the terms and conditions explained/defined. Both the broker and the carrier have to sign this page.
We’ll then move on to the next page, which is the reference sheet.
The reference sheet is where the carrier gets the entire broker’s information, including their mailing address, EIN, Physical address, MC number, SCAC, carrier references, bank references, etc.
This page is meant to put the carrier at ease, and let them know the brokerage is a trustworthy business.
Following that is the request certificate of insurance. This is what the broker uses to ensure the carrier has the right cargo/automobile liability insurance.
The carrier will add you as the certificate holder, so that you may be notified should that cover change in any way.
Also included in the document are the Quickpay Policy Guidelines. This will give the carrier all the information about how they can get advances or Quickpay.
All in all, that’s how you set up a carrier packet.
What you should be Mindful of when Filling Out a Carrier Packet?
The instructions on the cover page, the documents requested, and the carrier agreement. The instructions are important as they’ll help you get approved faster. And the same applies to the documents requested.
If you don’t send back the carrier packet with those documents attached, the broker might think you’re into some shady business.
Those documents include the w-9 tax form, Notice of Assignment, reference sheet, proof insurance, and letter of authority.
Lastly, you have to read through the agreement. Don’t just sign any dotted line you see, without understanding what the actual wording means.
Check out the video below:
Are there Any Fees Associated with Filling Out a Carrier Packet?
No, filling out a carrier packet is absolutely free. And if someone asks you to pay a certain amount before filling it out, or during submission, that person is likely a con artist looking to take advantage of your naivety.
The only fee that you might be required to pay is that associated with the letter of insurance, or if you’re subscribing to a PDF editor software. But then again, there are a lot of online PDF editor softwares that are free.
And that brings us to the end of today’s class. Please feel free to reach out should you have any more questions.