CFB Roles and Responsibilities 3 — Questions and Answers
Question 1: A freight broker discovers mid-transit that the carrier it booked has a conditional safety rating. What is the broker's best immediate action?
- Continue the shipment and document the rating for future reference
- Notify the shipper and assess whether to reroute to a satisfactory carrier (Correct answer)
- Cancel the shipper's load without notice
- File a complaint with the DOT after delivery
Correct answer: Notify the shipper and assess whether to reroute to a satisfactory carrier
The broker should promptly inform the shipper of the safety concern and evaluate rerouting options to protect the shipper's cargo.
Question 2: In a typical broker-shipper contract, the 'shipper's agent' clause may make the broker responsible for:
- Paying freight claims directly on behalf of the shipper (Correct answer)
- Setting fuel surcharge rates industry-wide
- Auditing the carrier's safety program
- Filing hazmat paperwork with the EPA
Correct answer: Paying freight claims directly on behalf of the shipper
Some contracts designate the broker as shipper's agent, which can create direct responsibility for freight claims paid to the shipper.
Question 3: Which party typically issues the bill of lading (BOL) on a truckload shipment arranged by a freight broker?
- The shipper or the carrier, not the broker (Correct answer)
- Always the freight broker
- The FMCSA regional office
- The consignee upon delivery
Correct answer: The shipper or the carrier, not the broker
The BOL is typically issued by the shipper or the carrier; the broker arranges transportation but is not a party to the BOL contract.
Question 4: How does a freight broker's role differ from that of a shipper's agent (or employee shipper)?
- A broker is an independent business that arranges transport for compensation; an employee shipper works in-house (Correct answer)
- A broker owns the freight during transit; a shipper's agent does not
- A broker is regulated by the FTC; a shipper's agent is regulated by FMCSA
- There is no legal distinction between the two roles
Correct answer: A broker is an independent business that arranges transport for compensation; an employee shipper works in-house
A freight broker is an independent, licensed intermediary compensated for arranging transport, whereas a shipper's in-house logistics employee acts exclusively for that employer.
Question 5: A broker who also operates as a carrier on the same shipment must:
- Disclose its dual role to the shipper and comply with both broker and carrier regulations (Correct answer)
- Only maintain broker authority since carrier authority is redundant
- Surrender its broker license while operating as a carrier
- Obtain a special dual-mode waiver from the ICC
Correct answer: Disclose its dual role to the shipper and comply with both broker and carrier regulations
A broker acting as a carrier on the same load must disclose the dual role and comply with all applicable regulations for both capacities.
Question 6: What is the primary purpose of a broker-carrier agreement (BCA)?
- To establish terms, rates, and liabilities between the broker and the motor carrier (Correct answer)
- To replace the bill of lading for LTL shipments
- To register the carrier's equipment with the FMCSA
- To allow the broker to file claims on the carrier's behalf
Correct answer: To establish terms, rates, and liabilities between the broker and the motor carrier
A BCA outlines the working terms, payment conditions, carrier requirements, and liability allocation between the broker and the carrier.
Question 7: A shipper asks a freight broker to 'double-broker' a load without disclosing the secondary carrier. This is considered:
- Unethical and potentially fraudulent, as it conceals the actual carrier from the shipper (Correct answer)
- Standard industry practice that requires no disclosure
- Legal as long as the secondary carrier is licensed
- Permissible if the shipper's rate is not affected
Correct answer: Unethical and potentially fraudulent, as it conceals the actual carrier from the shipper
Undisclosed double-brokering is widely considered fraudulent because it hides the actual carrier performing the transport from the shipper.
CFB Roles and Responsibilities 3
A freight broker discovers mid-transit that the carrier it booked has a conditional safety rating.
What is the broker's best immediate action?