Who's Liable When Freight Bills Go Unpaid | Episode 319

When freight moves but the carrier doesn’t get paid, who’s liable? Freight collections pros Cristina Belaval and Edgar Davison break down unpaid freight, bills of lading, and Section 7 non-recourse in plain English. They explain why shippers and consignees can still be on the hook, how to avoid double brokering and bad billing entries, and the practical steps that keep you from paying twice. If you touch freight, this episode gives you a clear playbook to protect margins and ensure the right party gets paid.

Cristina: https://freightcollectionsolutions.com/
Edgar: https://davisonlawfirm.net/

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Episode Transcript

SPEAKER_05 (00:19):
Welcome back.
It's another episode of theFreight 360 podcast.
We are up to 319.
It feels like just yesterday westarted recording these, but
come a long way.
We've got special guests againtoday.
It feels like we've been doing alot of guests on the show
lately, which is awesome becausewe're able to bring in folks who
are experts in their field andyou know we have a little
knowledge on, but um this isgood.

(00:41):
We're gonna talk more on the thefreight collections and and
legality of certain situationstoday.
We've got Christina Bellevalback with us again.
She joined us last month.
So, Christina, welcome back tothe show.
How are you today?

SPEAKER_00 (00:53):
Good, good, thank you, Nate.
Uh, good morning to all.

SPEAKER_05 (00:56):
Awesome.
Good morning.
And we are joined by EdgarDavison, uh, another Freight
Collections um specialist, as Imight say.
So, Edgar, welcome to the show.
For those that don't know you,which probably most of our
listeners aren't familiar withyou, just a quick rundown on who
you are and what you do, andwe'll dig more into your
specialty alongside Christina umthroughout the episode today.

SPEAKER_03 (01:18):
Sure.
Um, I'm Edgar Davison.
Thank you, Nate.
Um, I am uh I have my own firm,Davison Law Firm.
We specialize in um freightcollections for um motor
carriers for trucking companies.
I'm also general counsel forBaxter Bailey and Associates, uh
nationwide freight collectionagency.

SPEAKER_05 (01:40):
Awesome.
Well, we appreciate you bothbeing on the show today because
the the uh collections and andlegal side when it comes down to
payments and whatnot.
Ben and I have sat in thebroker's seat.
We've we you know we both umhave been exposed to the carrier
side too, but the uh thelegality of it all is not
necessarily our expertise.
So we appreciate you guys.

(02:00):
Ben, what's going on in Floridatoday?

SPEAKER_01 (02:02):
Man, nice weather.
Fall.
Finally outside of summer,football season's underway.
It was a good weekend.
I was surprised the Steelers wonit.

SPEAKER_05 (02:10):
So I was down there last week and it was great
weather.
I mean, it had like theoccasional rain here and there,
but like you can't ask foranything better than like 80
degrees and sunny, and you get alittle overcast and whatnot, but
just wonderful versus like goingin July when all you're all
you're wanting to do is run tothe closest building that's got
air conditioning.
So yeah, yeah.

(02:32):
Um, quick little uh sports here.
The World Series wrapped up.
It was a it was a good one.
Seven game series.
Um, here's what I thought wasinteresting.
It was game, I think it was gamefour, went like 18 innings and
set the record for the longest,like time-length longest World

(02:52):
Series game ever.
And it broke the record of thenight before my wedding seven
years ago, which was also gamefour.
They won 18 innings when my myRed Sox lost to the Dodgers, the
same team.
So the Dodgers, uh, and by theway, I set up for both of those
games, um, just to just to seeuh LA basically have a a you

(03:14):
know a victory for them.
But you know, anyone from I'mI'm in Buffalo and the Blue Jays
are uh we are the farm team forthe Blue Jays, so you got a lot
of lot of Jays fans here.
So once the Red Sox and theYankees are knocked out, pretty
much everybody uh hops on the onthe Jays bandwagon.
But uh seven games, and I reallythought the uh the Blue Jays

(03:36):
were gonna win it.
They were up like in the eighthinning, and then um Dodgers tie
it up, goes to what did it go tolike 11 innings or something
like that.
Edgar, did you see game seven?
Um I did not stay awake.
Okay, but yeah, the J then theJays won it, and um yeah, just I
was root I was rooting for theBlue Jays, but uh Okay, gotcha.

(04:00):
Um, Ben, football, Steelers,man.

SPEAKER_01 (04:04):
Yeah, I was shocked.
Yeah, honestly, and I was Irarely bet on sports anymore,
but I almost put a bet on theColts actually, and I couldn't
get in the hard rock app, whichis like the only one that works
in Florida because literally thekickoff was, and I was talking
to my dad, and he's like, dude,I can't believe they're getting
three points.
I'm like, there's no way theycover.

(04:24):
And I'm like, I was telling mywife, I'm like, I'm like, this
is probably like literally theonly game I felt like I wanted
to bet on all year.
I'm like, well, I didn't get itin any way, so hopefully the
Steelers win.
I was like literally shocked.
I was like, wow.
And then obviously watching theBills beat Kansas City was a
nice little uh Yeah, man.

SPEAKER_05 (04:41):
Uh so I was at that game.
That that felt good.
Um, I will say this that like itit it really felt like in a
typical Bills-Chiefs game, um,the Bills tend to lose not to
the Chiefs, but to the refs, andthe the refs, you know, they
played fair.
They played fair on Sunday.
So um yeah, good uh good showingby the Bills there.

(05:04):
Kansas City's in a rough spotright now.
They're like third in theirdivision, not even in a wild
card spot.
So Edgar, did you see that oneat all?
Bills Chiefs?

SPEAKER_03 (05:13):
Uh a little bit, yeah.
My uh uh my partner, she's a uhSwifty, so that makes her a
Chiefs fan.
A Chiefs fan, of course.

SPEAKER_05 (05:22):
All right, fair enough.
Christina, are you an NFL girlat all?

SPEAKER_00 (05:27):
No, not at all.

SPEAKER_05 (05:28):
Okay, alrighty.
Um, Ben, speaking of the Colts,I don't know if you saw like the
yesterday was a trade deadlinefor the NFL.
So you had the Colts like got uhSauce Gardner from the from the
Jets.
The Jets basically just likedumped their entire team, but
they got a ton of first andsecond round picks in the next
couple years.
So um who knows?
We'll see what happens.

(05:49):
Um, in news, I think the bigone, the biggest thing that this
came out last week with from theFMCS or from DOT really,
Secretary Duffy said he's gonnastart putting the responsibility
for the you know, thenon-domiciled CDLs.
Um he's gonna put it on theshippers too, right?
Saying that not only do carriershave to conform, but shippers

(06:13):
need to be responsible forknowing who they're loading.
And that's a really interestingsituation because that kind of
like inadvertently loops brokersinto the equation, Ben.
I don't I don't know if what ifyou had any thoughts on it?
I know me and Steven kind oftexted offline about it, but
where do you think this uh howdo you think it pans out?

SPEAKER_01 (06:30):
From I mean, it's all anecdotal, but I've
definitely heard from folks atlarger brokerages that they're
getting way more strict on thisin regards to verifying English
proficiency with driver checkcalls.
But I don't, I mean, honestly, Idon't know.
I have a really hard time withthe liability being pushed

(06:51):
towards brokers or shippersbecause the FMCSA is just so far
behind in really doing anythingand the information available to
do any of this is just notthere.
And it's like, how do you holdeither party accountable when it
is nearly impossible to be ableto verify either of those
things?

SPEAKER_05 (07:11):
The other thought I had too is like, what if the
shipper's not actually the thecustomer who owns blind BOO?

SPEAKER_01 (07:17):
Yeah, like that happens all the time.

SPEAKER_05 (07:18):
You've got all kinds of situations where like
literally someone else, like thereceiver might be the actual
customer who scheduled the truckto go pick up at some location,
and the location that's youknow, the the actual quote
unquote shipper, they have noidea, you know, how the truck
was vetted or you know, any ofthat driver level information.

SPEAKER_01 (07:38):
So it's like yeah, and then the other piece, like
I've seen again, it's justbasically anecdotal people
talking about it, but like Idon't really understand the
actual ELP.
Like, what is the standard forEnglish language proficiency?
Is that super clear?
Is it something that like ashipper would be able to even

(08:00):
like execute or do, right?
Because I don't know, like beingable to determine language
proficiency is rathersubjective, I think, for a lot
of different reasons.
So I I don't know how youactually would do that.

SPEAKER_05 (08:15):
But I'd be willing to bet there's some sort of test
similar to like when you go andtry to get like your learner's
permit or your license.
There's the red part.
I'm assuming there's somethingalong you know along those
lines, is my guess.
But I don't know.
I think I think it's all fluff.
Like it's you know, you get alot of like just uh the you

(08:37):
know, kind of like the the mediaeffect, like hey, I'm gonna say
this, but in reality, you know,what are we gonna do?
So I don't know.
Anyway, and then you had the uhdid you see the the plane crash
and in Kentucky last night atthe end of the day?

SPEAKER_01 (09:38):
Yeah, it was UPS, wasn't it?

SPEAKER_05 (09:40):
Yeah, UPS.

SPEAKER_01 (09:41):
So seven people, I think, confirmed so far, um died
in the crash, but it alsocrashed into a warehouse.
And I think as of this morning,like two or three of the workers
at the warehouse were stillmissing and they were still
pulling together information onit.

SPEAKER_05 (09:56):
Yeah, sad to see that, man.
Crazy.
Like you got a fully loaded umplane with fuel to go to Hawaii,
right?
And it it crashes on takeoff.
So a lot of uh lot of jet fueljust burning up there.

SPEAKER_01 (10:11):
So I think it was 38,000 gallons, is what I saw
this morning.
That's nuts.

SPEAKER_05 (10:17):
So well, sad to see, but uh hopefully, you know,
hopefully there's uh minimalfallout after after the fact on
that one.
So um, all right.
Well, let's let's get into umcollections here.
So I know Christina, we talkedwith with you in quite detail
last month, and now we've gotEdgar on today.
So um Edgar, you you shared withus your uh your outline.

(10:41):
Um you what do you call likeyour elevator pitch on like this
is what I do, right?
So I'm I wanted to kind of setthe stage a little bit with um,
you know, what is what is itthat you do specifically at your
practice?
I know you mentioned you're alsowith Baxter Bailey, but just
kind of um lay it out for us,and then Ben and I got some
questions for you and somesituations we kind of want to
talk through.

SPEAKER_03 (11:01):
Um sure.
Um can you hear me okay?
We got you.
Yeah.
Okay.
Um, yeah, I'm uh um generalcounsel for Baxter Bailey and
Associates, but um, you know, uhas a part of our process, once
um a claim goes throughcollections, it comes to me, so

(11:22):
then at that point I determineuh if a case needs to be
litigated.
Um at that point I have toanalyze the the uh the bill of
ladings and rate confirmationsand all the shipping documents
to determine whether you knowthe shippers and constantis have

(11:43):
liability and and if the thebroker or any other third
parties have have liability.
Um so that's basically my job,you know, I determine what
jurisdiction that the case needsto be filed in.
Um you know, we send a lot ofmatters to Christina in Texas,

(12:06):
and you know, if I can file itmyself, I do.
I'm licensed in Tennessee andArkansas, so um in those states
I will file.
Uh, but we work with attorneysall all across the nation to
file these.
But let me ask you this.

SPEAKER_05 (12:21):
On that note, what determines the state in which it
would be filed?
Is that based on the like theheadquarters of the shipper or
of the carrier, or what whatwhat does that look like?

SPEAKER_03 (12:34):
That's a very good question.
And it can't, you know, we couldtalk all day about jurisdiction,
uh, especially intransportation, um, because you
have usually three or fourdifferent parties in three or
four different states um for aninterstate shipment.

(12:55):
You know, you could file itwhere the shipper is, uh
potentially, you could file itwhere the broker is,
potentially.
Uh some cases you have twobrokers.
Um so that could be twodifferent states.
You could file it where theconsonee is, the receiver of the
goods.
Um there's also the potentialyou could file it where um the

(13:20):
carrier is located as well.
So you have you know severaljurisdictions that you could
pick from in any given um innerinterstate um shipment.
Now in an intra-state shipment,which is within the you know,
state borders, one state, andobviously you're gonna file it

(13:43):
in the state that it was shippedin.

SPEAKER_05 (13:45):
Okay.
Gotcha.
So and I wanna kinda remindfolks if they if they haven't uh
listened to the last episode,the one of the big things that
Christina hit on is like ifyou're gonna go to the if you're
gonna go the legal matter ofcollections, right?
Let's say we'll go the let's sayit's just a carrier directly

(14:05):
with a a shipper, right?
If you're gonna go the legalroute of collections on a
customer, you have, for allintents and purposes, like
you've kissed that relationshipgoodbye.
Like it's not, it is not goingto be revived once you've you
know serve uh legal papers toyour customer, or you have, you
know, you have so a lawyerattorney serve legal papers to

(14:26):
your customer, right?
So um I want to ask both of you,you know, do you when it comes
to like a client of yours that'slike, yeah, this is unpaid, and
they're they're trying to figureout, you know, do we go the
legal route?
Is there like a percentage thatthey're able to work out without
legal matters?
Or, you know, I guess what doesthat look like when you cross

(14:49):
that line of like, yep, we'regonna sue them?
Does that question make sense?
Yes, it does.
Um, and and um I have to.
And the reason I ask is i i as abroker, right?
Like we try everything we canbefore we're like, we're saying
this to collectionists.
Because we know as soon as we doit, like we're never gonna work
with that customer ever again.
That's our assumption, at least.

SPEAKER_03 (15:09):
Yeah, yeah.
And what what you're talkingabout is a business decision.
And and that's something thatthat you certainly have to
consider, um, you know, insteadof just the pure legalities of
it.
I mean, you may have a a stronglegal case, but you don't want
to tie it, you don't want to uhsever that business

(15:30):
relationship.
And like you said, once you filethat suit, uh that relationship
is probably uh not salvageable.
Um but I have situations wherewhere we've already filed suit
or um prior to suit where ashipper or a broker uh will come

(15:57):
to me and say, Hey, we'll g youknow we'll agree to to give you,
you know, future loads or orwhatever if you drop this.
Um some kind of you knowequitable deal like that.
Um that happens fairly often,actually.
Um so that's something thatcertainly we will consider if

(16:20):
the client or the carrier reallywants to to work with the broker
and not not sever those ties.
Or if we represent a broker andit's the the other way around.

SPEAKER_00 (16:31):
Uh I would also add that when you have a collections
agency working on your behalf,it is more likely to uh separate
yourself from the collectionagency and let the client know,
for instance, that I I can'tabsorb this debt on my own and I

(16:52):
need to send this out forcollections, but future loads we
can we can continue working withyou because you have sort of a
buffer.
Uh you're not suing themdirectly, it's Baxter Bailey
that's suing them on yourbehalf, but they they got an
assignment from you.

SPEAKER_05 (17:08):
That's interesting.
Yeah, kind of like the conceptof like I'm not I'm not the bad
guy, but you know exactly whatmakes the most business sense
for me is to go this route andyou know they're gonna they're
gonna be the quote unquote youknow bad beast knocking on your
door.
So right.

SPEAKER_03 (17:25):
Good concept.
That's a that's a that's a verygood point.
You know, once it cut once itgoes to Baxter Bailey or some
other collections agency, it'sgenerally assigned.
So, you know, that the the uhcarrier a lot of times is not
even the named plaintiff.

(17:45):
It'll say like Baxter Bailey asa as the knee of you know
whatever trucking company, ABCtrucking company, um or even
just Baxter Bailey versus youknow, whatever shipper or
broker.
Um so that's a good pointChristina made.

SPEAKER_01 (18:03):
And I think what's gonna be helpful too is like
let's just go through the mostcommon situation for anyone that
isn't kind of familiar with howthese play out, right?
So it's like shipper gives theload to a broker, broker books a
carrier, broker talks to thecarrier, broker runs the load,
load is delivered, everything isfine.

(18:24):
Broker then gets an invoice fromthe carrier they believe that
ran the load.
Okay.
And in some cases, there's eventracking involved.
So from every point of view, thecarrier, I mean, the broker
looks, verified the truckingcompany, looked at the
insurance, tracked the MC, loadis delivered, then the carrier
sends the broker an invoice withthe POD, the proof of delivery

(18:45):
signed.
The broker then pays thecarrier, and then broker sends
the invoice to the shipper,shipper pays the broker,
everyone is moved on, movingother business, right?
And almost all these, what wesee is like 45 days later, an
email comes from a carrier thatsays, Hey, I ran that load for
you, broker.
You owe me money.
And then the broker goes andlooks at their TMS and goes, I

(19:07):
don't know who this carrier is.

SPEAKER_05 (19:09):
Or the customer because they the carrier doesn't
know who the broker is, right?
And they go, I know I picked uphere.
And the customer's like, Mr.
Broker, like, dude, take care ofthis.
I already paid this, I alreadypaid you guys on that.

SPEAKER_01 (19:21):
Every one of these I've seen, it was initiated by
the customer, where you get anemail from the customer that has
a carrier and copy and says,Hey, because the carrier knows
they picked up the load.
So they reach out to thefacility, they go, Hey, this is
the PO I moved for you on thisdate.
Here's the POD.
I haven't been paid.
And then every the broker islooking at it like, I don't know
who this is, what happened.

(19:41):
The shipper goes, Hey, take careof this.
I've already paid you.
So the shippers paid the broker,broker has paid the carrier.
They believed ran the load formultiple reasons.
Tracking, spoke to them,verified it, and got a POD from
another carrier.
Now all of a sudden there'sanother carrier that comes up
and says, Well, now you owe memoney.
And the shipper goes, I alreadypaid you broker.
I'm not paying twice.

(20:02):
So then the broker then has tousually make the decision of, do
I pay this second carrier or howdo I verify that this is true in
the first place, right?
So I know in a lot of thesescenarios, the broker will ask

(21:06):
the new carrier that has shownup and said, I ran this freight
and didn't get paid.
Hey, can you send me an ELD?
Can you send me someverification that I can see that
shows you ran this, just so thatlike we understand and can kind
of work through this?
Then you get them.
And then normally in thesescenarios, like Nate said, and I
think, you know, also at yourpoint, I was like, most of the
time the brokers will make abusiness decision, realize that

(21:29):
this carrier ran the load, Gowill find out that something
fraudulent happened with thecarrier you believed ran the
load, and usually either paythat second carrier or that's
when you guys get involved.
And like from there, can youkind of explain to people how
and who is responsible and why,right?
Because you have a carrier thatclearly ran that load, right?

(21:51):
Did not get paid, and then youguys get involved.
And then this is where I think alot of confusion is on the
broker side and the shippers oflike, well, that's not our
fault.
We paid this other carrier, wedon't know who this is.
Who is responsible for makingsure that carri gets paid?
And I guess why, for anyone outthere trying to understand them.

SPEAKER_03 (22:11):
Okay.
Um, yeah, in the situation wherethe carrier is not paid, um both
the shipper and the consinee,which is the receiver of the
goods, can be liable legally.
Um the bill of lading is thecontrolling document on on all

(22:32):
interstate shipments.
Uh, and every load has to have abill of lading, uh, which lists
the shipper and consinee uh andthe carrier.
The controlling case on this isOak Harbor versus Sears.
It says that the consaneeshipper and broker are jointly
liable for unpaid freightcharges to the carrier.

(22:53):
Uh so based on the law, thecarrier, if they're not paid by
a broker, um, then they can goback to the shipper and say,
Hey, you know, your broker didnot pay, I need paid for this
load, and and can legally uh goforward against the the shipper

(23:15):
uh uh and the consanee.
Uh there's there's more um morelaw.
Um uh there's a statute thatthat makes the consonant liable
as well.
Um but in that situation, uh,like you said earlier, the
shipper's gonna go back to thebroker and say, Hey, I already
paid this.

(23:36):
I paid you, you were supposed topay the carrier.

SPEAKER_05 (23:39):
Um so in that in that case law was there was a
broker involved in the middle?
Correct.
So the the shipper paid thebroker, the broker never paid
the motor carrier.

SPEAKER_03 (23:50):
That's correct.
Okay.
That's that's that's thesituation we run into daily.
I mean, that's what you knowChristina and I do for a living.
Um and you know, there's a caseit's uh it's called Excel.
Uh the truck lines, it's um itstates that the bed bedrock rule

(24:13):
of carriage is absentmalfeasance, the carrier gets
paid.
So there's a public policy.
Um what does that mean like uhnon-legal speak?
Yeah, uh it's basically if thecarrier didn't do something
wrong or or scammy or you know,was not a part of of of the

(24:35):
scam, um uh then they should getpaid for hauling the load.
And you know, the policy or thepublic policy um consideration
is this carrier spent their youknow, time, uh money, fuel
costs, uh labor uh to haul theload, and and everybody got

(25:01):
their their services provided tothem, but the the carrier you
know is out money.
So it's not equitable that thecarrier gets siffed in that
situation.

SPEAKER_05 (25:13):
Let me ask this, because in a situation like
that, why wouldn't the carrierjust file on the broker's bond?
Or is it in most cases thebrokerage is out of business?

SPEAKER_03 (25:23):
The bro the broker the carrier generally will file
on the broker's bond, um but yourun into a situation even on the
$75,000 bond, if if this brokerhas multiple debts that they
have not paid, which is the casewith many of these, uh the

(25:45):
carrier's gonna get pennies onthe dollar.
Uh they're not gonna be madehold whole for the shipments
they're making.

SPEAKER_05 (25:53):
So then they can go file the remaining amount on the
shipper.
Is that okay?
All right.
That's correct.
I mean, like the what I've seenwhen I've seen these play out in
the past, like usually a brokermismanages money.
I saw this a ton during COVID,where like, you know, money was
great, everyone was doing well,you know, and then all of a
sudden, like rates dropped, anda lot of brokerages that didn't

(26:18):
know how to manage their moneycouldn't afford all the stuff
that they were paying for whenthe money was good.
They had this sweet office andthis sweet car and all the, you
know, going on.
They're just blowing money,right?
And then all of a sudden, whenrates are down and they can't
keep cash flow up, they're like,they're trying to like slow pay
carriers and trying to make itup.
And next thing you know, they'relike, we gotta shut the doors,
right?
And I've heard carriers saying,like, we filed on the bond and

(26:42):
we didn't get, you know, weeither got nothing or we got,
like you said, pennies on thedollar.
Yeah.
So that makes sense.

SPEAKER_03 (26:47):
And that happened that happens all the time, and
it's very rare that a carriergets made entirely whole from
filing on the bond.
You know, uh, ideally, you know,the they will, but uh it rarely
happens because there's gonna beif a if a broker uh goes out of

(27:10):
business, there there's not justone carrier that's owed.

SPEAKER_01 (27:14):
Here's the other two questions I'm I'm curious,
right?
Is we talked about this uh likeoff-air, is the other really
common thing we see in theindustry is broker books a
carrier, that carrier gives thatload to another carrier, right?
Now, like it's commonly referredto as a double brokering, but I

(27:35):
think it's better defined aslike unlicensed brokering
because a motor carrier'sfraudulent brokerage activities
is how the TIA has coined theterm.
So that means, hey, I book acarrier and that carrier gives
the load to another carrier.
Well, that carrier doesn't havethe license to arrange
transportation with anotherentity.
And the carrier okay, go ahead.

SPEAKER_03 (27:56):
Well, sometimes those the scams will have um a
broker at the brokerageauthority and a carrier
authority, and that's how thescams ran.

SPEAKER_01 (28:06):
Dual MCs.
And then there's a second onetoo that I want to talk about
where like I book a carrier,that carrier then impersonates a
legitimate brokerage to book alegitimate carrier, right?
And then that carrier doesn'tget paid.
But to just separate them for asecond, right?
Like I book a carrier, thatcarrier gives a load to another
carrier, right?
How or what does that complicatethings, make it more or less

(28:30):
difficult for the carrier thatactually ran the load to be able
to get paid?
If they are willfully taking aload from another motor carrier,
does that make it easier orharder for them to be able to
collect on an undue freightcharge?

SPEAKER_03 (28:43):
Yeah, I'll let Christina take this one.
This it's a good question.

SPEAKER_00 (28:48):
My experience is that it does make it harder for
the carrier uh to collect underthat scenario because uh you
should know the law.
And the law says that carrierscan't broker loads.
So if you take a load fromanother carrier, you run the
risk that you won't not be ableto collect from the shipper or
the consignate.

(29:09):
But in some instances, shipperand consignate do not know that
that was a carrier that gave theload to another carrier.
So it's not going to preventcollections always, but it's
going to make it more difficult.

SPEAKER_01 (29:23):
Right.
And that's one of the reasonswhy when we talk about this, is
like we have a lot of carriersthat listen to the show that we
work with that like this is justa really good best practice to
be aware of when you're doingbusiness, right?
Where and verifying who you'regetting business from.
Because the thing I was curiousis you said this a moment ago,
Edgar was an absence ofmalfeasance, right?
So I was looking up legaldefinition of malfeasance,

(29:44):
right?
To like literally read what thatis.
And again, this is literallyGoogle.
So correct me if I'm wrong, butit's unlawful or wrongful act,
right?
But misfeasance is neglect,right?
And is there a difference?
Because in one, if I'm a carrierand I take a load from another
carrier, to me, that is at thevery least a wrongful act, maybe

(30:05):
not unlawful, but it iscertainly not legitimate, I
would say, right?

SPEAKER_03 (30:11):
Like And you know, that's a that's a good question.
I think that's a that's afactual question, you know,
where what um you know how youknow how what what is
malfeasance really, you know,and what acts constitute
malfeasance, and that's notreally defined.

(30:32):
Um but I think um that reallythe the if the carrier's not
actively doing something, youknow, fraudulent or uh involved
with the scam, then I I thinkthey they do deserve payment.

(30:52):
You know, to what extent um isan omission by the carrier
grounds for non-payment is a,you know, it's really a question
for the court or the jury if itgets that far.

SPEAKER_01 (31:05):
Yeah, and the reason I say this is like Nate and I
talk about two things that areprobably like the simplest
things that can avoid this forpeople operating in the
industry, right?
From the broker side, making aphone call to the FMCSA phone
number and sometimes theprevious one to verify you're
still doing business with thecompany you think you are.
And the same thing from thecarrier side, right?
And every one of these that I'veworked through for a carrier

(31:27):
that has reached out, like, hey,can you help me with this?
What should my next steps be?
Is like, I'll look at the ratecon and there'll be a broker's
name on it.
And the first thing I look at isis the domain correct?
Or is that really the brokerageyou thought you were doing
business with?
Or literally just making a phonecall to that brokerage and
saying, Hey, does this personwork there?
And in a lot of these, they'relike, Oh, yeah, that broker

(31:48):
doesn't work here.
And oh, that's not our emailaddress or our domain.
It is like one letter off.
So the carrier, right, being thevictim of Fraud thought they
were doing business with alegitimate brokerage, but that
person didn't really work there.
The domain was fraudulent andthe websites were not accurate,
right?
And again, like if I'm doingbusiness as a carrier with a new
broker, just that phone call toverify that who you got the load

(32:11):
from is from that company and islegitimate, I think could avoid
a lot of these things for them,right?

SPEAKER_00 (32:17):
Also, another thing that carriers should do is check
on the safer webpage if theirbond is still active.
Because if their bond iscanceled, they're they already
started not paying.

SPEAKER_01 (32:28):
Yes.

SPEAKER_03 (32:29):
Oh, that's a great points.
Very yeah.
And and for and for uh the youknow what we call the the the
lead broker, the legitimatebroker, uh, when you're you know
when you're you know hiring acarrier, you go on safer and you

(32:51):
see that a truck that they haveyou know a few trucks but no
inspections whatsoever, I meanthat should raise some red
flags.
Yes.

SPEAKER_05 (33:01):
And I think, yeah, I think over the last few years,
our tools and our processes andour you know just self-education
on these scams, I think it'scome a long way, and we're doing
a better job as as brokers tovet carriers.
I think a lot of times thevictims in a lot of these cases

(33:22):
is the the owner operator whoyou know doesn't have the time
or the technology to try and vetevery broker out, and they
choose to just blindly trust umwhoever they're talking to,
right?
So, yeah.
I mean, I think on the on thebroker side, we've we've done a
good job at it, but it I I stillthink it's gonna be a really

(33:43):
tough thing for some of thesesmaller carriers that just they
yeah, like I said, they justdon't have the time or the
capability to go as in-depth aswe do as brokers.
Because we sit behind a computerall day long, they're behind the
wheel the majority of the time.
And it's really difficult.

SPEAKER_01 (33:56):
So numbers on this.
Like what's great caviar hadthis out this morning.
So the estimates, the mostrecent estimates I've read were
literally this morning, theywere talking about new scams
that are being perpetrated likeacross the whole supply chain.
And the newest estimate was$32billion in 2025, which was

(34:19):
likely a 25% increase over lastyear, right?
So it's literally like eightmore billion dollars was stolen
in either funds to carriers,right, brokers, or just outright
cargo theft, right?
Just over last year.
So like this is not getting,this is not getting better.
It's getting worse, and morepeople are becoming victims of

(34:41):
these things, right?

SPEAKER_05 (34:42):
Yeah.
I so I've got a um anotherquestion, a little, a little
pivot here, but one of thethings that we're often asked to
do as brokers as a value add toour customer is to they're like,
hey, can you just, you know, canyou get the BOL created for me
and and send it over, right?
So that's one of the things thatwe'll often do.
And I'm curious, the box thatsays third-party charges, right?

(35:05):
If we if the broker, if thebroker's information goes in
there, does that have any weightat all to liability to pay the
motor carrier listed on thatbill of ladings?
I know we said the bill oflading is a legal document,
right?
It's gonna have the shipper, theconsanee, and potentially
third-party charges.
And even there's a box forprepaid.
So I'm curious, where does allof that play into um when it

(35:27):
comes, you know, when the rubbermeets the road, who's liable in
the situation where maybeprepaid is checked, but it
wasn't prepaid, or maybe abroker's listed as third party?
How does that how does that panout?

SPEAKER_03 (35:39):
Um, good question.
These are very good questionsbecause the you know, the bill
of lighting is is so importantum to collecting freight
charges.
Um as far as third party, um youknow that just makes in my

(36:00):
opinion, that makes extraliabil, like almost extra
liability on whoever's in thethird party.
But legally, they're not ashipper or consonee, so they're
not technically um um liableunder the the case law.
But I would say there that oncesomebody is entered into the you

(36:23):
know bill third party, um thatthat company is a part of the
the bill of lighting, which isthe contract um between the
parties.
Uh so uh I I would argue thatthat that party is liable.

SPEAKER_01 (36:40):
Um so I have a question.
Uh just on that before you gobeyond that, like what are some
best practices?
Because in some cases, like theshipper asks the broker to
create the bill of lading,right?
And in some cases, the brokerputs their company name on the
bill of lading, in some cases,the shipper's name is on that
bill of lading, in some cases,the consanee's on it, and

(37:01):
neither are, right?
Are there any things that youcould say like should be
happening that make, I wouldsay, are best practices for just
bills of lading, right?
Are there increased liability ifthe broker is creating the bill
of lading, right?
Should they make sure it's nottheir company name on it?
Should they make sure it's theshippers?
Should the carrier be writingtheir name on the bill of lading

(37:22):
for the POD?
What are some of the things thatpeople, I guess, should be aware
of related to that?

SPEAKER_03 (37:26):
I mean, I I I don't think a broker should put their
information um on the bill oflading.
You see it all the time.
You see the broker's name in thecarrier box.
That's not proper.
Uh the actual carrier should belisted as the carrier on the

(37:47):
bill of lading.
And carriers need to make surethat their name is on the bill
of lading, even if if thebroker's name is printed on the
box.
I think you know, the shipper,the actual shipper of the
product needs to be in theshipper box.
The receiver of the productneeds to be in the consony box.

(38:08):
Now, you if you want to put billto third party and and and put
your information in just uh toassist uh uh the other parties,
I don't think that hurts you,but I do think it it uh it could
potentially uh create liabilityuh based upon the contractual

(38:29):
bill of lading.
Yeah, the re the reason I'veseen that go ahead, Christina.

SPEAKER_00 (38:34):
Wait, I wanted to add that for the shipper to be
excluded from liability underthe bill of lading, there's
what's called the section sevenor non-recourse provision.
So if you are the shipper andyou don't want you do not want
to be liable for those shippingcharges, you should check that
box or sign your name where itsays non-recourse section seven.

(38:57):
And then prepaid is a defensefor the consignee, as long as
the consignee can demonstratethat they in fact prepaid that
shipment.

SPEAKER_05 (39:06):
Where is that not?

SPEAKER_00 (39:07):
The consignee wants to be released from liability,
they have to check the prepaidbox and they have to save
evidence that they in factprepaid.

SPEAKER_02 (39:14):
Okay.

SPEAKER_00 (39:15):
But another catch is that if both section seven and
prepaid are checked, theyinvalidate both, and then
everyone's liable.
So the carrier's gonna get paidby one.

SPEAKER_05 (39:26):
What is the section seven part?
I'm not familiar with that.
Is that on a on a bill oflading?

SPEAKER_00 (39:31):
In the standard bill lading, you look at the portion
that says non-recourse orsection seven, it says that the
shipper is not liable and thecarrier has to collect from the
consignee.

SPEAKER_05 (39:42):
See, this is Ben, and this is like for the broker
audience out there, right?
These TMSs that are out therenow that create bills of
ladings, they are not allstandard and have all the same
stuff, right?
And that's where like I've evenseen I've seen systems that
create a BOL that doesn't evenhave a place to sign, like by

(40:04):
the at the shipper, at thereceiver, and for the driver.
And I'm like, I'm like, how canyou pass that through as a bill
of lading?
And they're like, well, it'smore like a POD.
Um but that's interesting.
So there's super helpfulrecourse part.

SPEAKER_01 (40:17):
Well, here's the other question.
Go ahead.
Go ahead.
No, finish that thought, Edgar,because I was gonna ask like
another question came to it.

SPEAKER_03 (40:24):
That uh most people don't even see um the reverse
side of a bill of lading, um,which is um standard on a what
they call a uniform bill oflading.
There's nothing uniform anymore,though.
It seems the bill of ladings areall over the place, like Nate

(40:45):
was saying.
Uh, but there used to be astandard form, and and it's
still used, and you'll see it ona lot of bill of ladings.
It's called a uniform bill oflading.
Um, and there is a reverse sideof that which has terms and
conditions.
Um and um but most most of thethe carrier never sees that.

(41:08):
Um yeah, they don't scan them ineither.

SPEAKER_01 (41:10):
Like you never see them on the invoice, it's always
just the front side of it.
Because I I was thinking aboutwhen you were saying section
seven, I was thinking of Nate'squestion.
I'm like, oh, I've seen the backof literal original ones that
have this on there, but when weget them, it's always the
scanned face of it, right, withthe carrier's invoice.
So like we rarely see the backend.
And then to Nate's point, allthese TMSs just create them with

(41:32):
whatever information they wantto put on it, which just
completely unstandardized them.

SPEAKER_03 (41:36):
Right.

SPEAKER_00 (41:37):
But they're if you're the broker and you're
creating the bill of lading, youshould use the the uniform bill
of lading.
And since you're doing it forthe shipper, you should you
should sign the non-recourseprovision.
So if your customer isn't goingto be liable, you're not going
to be liable either.

SPEAKER_01 (41:54):
I'm literally taking a note to do that later.

SPEAKER_05 (41:56):
Yeah.
Um where does one find a uniformbill of lading?

SPEAKER_00 (42:00):
You can Google it.

SPEAKER_03 (42:01):
You can, yeah, it's it's online.
It's yeah.
All right.
Got some homework to do.
It's pretty easy to find.
Um, but yeah, there there's abox on the front um that um says
subject to section seven, blah,blah, blah.
That's where the shipper shouldsign off on it if they don't

(42:22):
want to be liable for thefreight charges.
Okay.
Um But Christina, like Christinawas saying, uh, Bill of Ladings
can be prepaid or collect.
Um, and you'll see um you'll seethem marked prepaid collect or
third party, right?

SPEAKER_05 (42:40):
Or the three boxes.

SPEAKER_03 (42:41):
Yes.

(44:00):
And and um prepaid just meansthe shipper is responsible for
the freight charges.
Collect means the consonant isliable for the freight charges.
So one way one way the shippercan can get out of you know
liabilities is if section sevenis signed and it's a collect

(44:21):
bill of lading.
At that point, we we don't havemuch against the shipper at all.

SPEAKER_01 (44:26):
Here's the next question
blind bill of lading, what andhow does that either complicate
it or make that less?
So, like, hey, I'm the one thatis buying product from Edgar,
then I'm selling it to Nate, butI arrange transportation to pick
up from your facility to ship toNate, and I don't want Nate to

(44:49):
know that it came from yourfacility, right?
Are there best practices becauselike I have we have a client
right now that has a largecustomer that this is like all
they do, right?
Like everything is a blind billof lading.
They're all shipping from wherethey purchase, right?
It's in the food industry, solike they don't want their
customers to know where they'resourcing it from.
So the shipper's name, theydon't need they don't want their

(45:11):
customer to see because then thecustomer can just cut them out
and order for them directly,right?
So does that complicate thingsin any way or not?
Does that change who'sultimately responsible?
Since I'm arrangingtransportation, right?
I'm technically the BCO, right?
Even though I shipped it fromyour facility to Nate.
But I don't want Nate to know itcame from your facility.

(45:33):
So are there any best practicesto do in blind bills of lading?

SPEAKER_03 (45:36):
I think it would turn on who was who issued or
who was named on the bill oflading, but it's also going to
be determined by who's thebeneficial owner of the goods.

SPEAKER_00 (45:51):
Exactly.
So um So even if you don't wantto be identified, uh if it was a
warehouse or it was someone,whatever, we're gonna pursue
that party, and they're gonnasay no, but we're we didn't own
what you were shipping, andthey're going to identify you,

(46:11):
and then we will pursue you.
Even if your name isn't in thebill of lading, you're
technically the shipper.

SPEAKER_01 (46:17):
Here's a question from the you're still the
shipper.
The question I always have isdoes it is it more about who
arranged it?
Because owner of the goodsliterally changes, right?
Like I purchased it from Edgar,but once it got to Nate, it's
FOB delivery.
Nate owns the goods once hereceives it.
So does it matter when you'redetermining the owner or who's

(46:37):
arranging the transportation?

SPEAKER_00 (46:39):
So the shipper is the one who arranges the
transportation, even if they'renot identified as such, but the
consignor is who surrenders theshipments.
And the shipper and theconsignor are jointly and
severally liable.
Got it.
So but if you can demonstratethat you're just an agent, that
you are not the true shipper,then the warehouse is gonna get

(47:00):
out, or whoever was selling iton your behalf, it's gonna go
out.

SPEAKER_01 (47:04):
So I have one last question.

SPEAKER_00 (47:06):
Step into the shipper shoes.

SPEAKER_01 (47:07):
Got it.
And that makes perfect sense,right?
Like I arranged the shipmentfrom Edgar's warehouse to sell
to Nate.
I'm the one that is technicallythe shipper, even though it was
picked up from Edgar's facility,right?
Now, the question I have,because we I literally ran into
this last week, is it the samescenario, right?
Like I arranged it from Edgar'swarehouse to ship to Nate, but

(47:29):
Edgar's the one that created thebill of lading.
His team at his warehousecreated the bill of lading.
And the bill of lading had didnot have all the information it
should have had.
In this specific case, they didnot put the temperature on the
bill of lading, the legaldocument.
And a claim arose.
And the carrier is like, well,hey, there's no temperature on
the legal document.
So how are you going to tell meI didn't do something you

(47:51):
literally didn't put in writing?
But I'm the shipper, but I don'tI didn't create the bill of
lading in this case.
Like, how does responsibilityget unwound in a scenario where
the shipper isn't the one that'slegally creating that legal
document, I guess?
Or should I make sure I'mcreating the bill of lading to
give to the carrier or to sendto Edgar's warehouse to make

(48:12):
sure he gives it to the driver?
Like, how would you likeprocedurally should that be
done?
I guess is another way to askit.

SPEAKER_00 (48:19):
So in that scenario, I would say that the warehouse
does have liability for the lossbecause they have the obligation
to instruct the carrier as towhat temperature it has to be
maintained.
The carri doesn't have anyliability because they weren't
given that instruction.

SPEAKER_03 (48:37):
Right.
There's the carrier's notcontractually obligated to keep
it at any temperature if they'renot on notice of it.
Um that's a decision.
Now you define notice if it is.

SPEAKER_01 (48:48):
So then the question is defining notice because the
carrier had email writtenconfirmation of what the temp
should be prior to pickup, andthe facility that didn't put it
on the bill of lading said theyverbally told the carrier, which
is obviously there's no way toverify, right?
So it happened in two differentways, but the email
correspondence to the carrierprior to arranging this, right,

(49:12):
at least is written, but it'scertainly not on a legal
document, right?
And a rate con most people thinkis a legal document, which it
isn't, right?
It is the bill of lading, right?
Does that in some way make thatmore or less clean to determine
responsibility?

SPEAKER_00 (49:27):
I would say it would be a fact issue at the end of
the day for the court to decide,which makes it much harder on
part of everyone uh to collect.
But I think that the carriagemay have liability in that case
because they they were givennotice, even if it it wasn't
included in the bill of lading.

SPEAKER_03 (49:45):
Yeah, uh I agree with Christina on that.
That's um certainly a factissue, and you know what it's
whether that was sufficientnotice to the carrier is I'm not
sure.
Yeah.
Interesting.

SPEAKER_05 (50:01):
So I did see in your notes here, and I didn't think
about this, but a broker carrieragreement, or even for that
matter, like a shipper a shipperbroker agreement, right?
We sign these all the time.
If there's a clause in therethat states like that the
shipper basically says, like,hey, we're not uh we're not

(50:22):
liable for you know if thebroker doesn't pay or whatever,
you know, is there is there anyit basically it sounds like no
matter what the agreement saysthe law trumps any of those
clauses that someone would mighttry to put in their contract.
Is that accurate?

SPEAKER_03 (50:38):
Um well there's two different agreements.
There's there's a broker carrieragreement and there's the broker
shipper agreement.
So, you know, we deal mainlywith uh broker carrier
agreements.
Um and you know, some of thoseagreements have clauses in there

(51:00):
that says, you know, you're notallowed to contact the shipper
or consanee uh even if we don'tpay you.
You know, and it's a prettydraconian clause, but it's you
know snuck in there with eightthe eight-page document that
that these carriers just youknow basically click through and
sign.

SPEAKER_05 (51:19):
They don't read them.

SPEAKER_03 (51:20):
But a lot of some of the courts say we don't we don't
care what you know that documentum uh could be voided if if you
don't get paid because it reallyuh it's it's uh that means the
broker has breached the contractessentially.

(51:43):
They breached the whole thewhole agreement by not paying
you.
That was a material um conditionof that whole that whole
agreement.
Um you know, and and non-paymentby the broker, uh it it's it's
my always my argument that thatyou the carrier shouldn't be

(52:04):
held to the broker carrieragreement if the broker does not
comply with the broker carrieragreement.
It's a breach.

SPEAKER_00 (52:11):
Yeah, another thing is that the shipper and the
concernee are not a party tothat broker carrier agreement,
so as third parties, it's moredifficult for them to enforce
that that agreement unless theycan prove that the purpose of
the agreement was to benefitthem, which is very hard to
prove.

SPEAKER_05 (52:28):
I was almost thinking if like a shipper,
because I mean that Ben, you andI have seen some of the most
outrageous language incontracts, and I know we're not
having that discussion today.
Um, we've done that before, butI'm almost wondering from a
broker's perspective, like if aif a shipper tried to put a
clause in there that that likebasically prevented them from

(52:50):
having to double pay a shipmentbecause we got double brokered
or something like that.
Like I'm almost wondering iflike that's something that a
shipper has ever tried to do,saying, like, hey, in our
agreement broker, if you fail topay the right person and that
person then comes back to us,we're not liable to pay them.
You still are.
Have you guys ever has that evencome up as a has that I mean?

SPEAKER_03 (53:13):
So yes, um, that did come up in a very large case I'm
handling right now.
The carrier has no privy ofcontract, so the you know, the
carrier can't be held to that.
That's between the the shipperand the broker.
Uh carrier can still go afterthe broker in that case.
Uh there is the shipper, okay.

(53:35):
And the shipper.
I mean, yeah, I'm sorry.
The carrier can still go afterthe shipper.

SPEAKER_05 (53:39):
So the bottom line in all of this is that the
shipper is responsible to paywhoever actually performed the
services of transporting thegoods.
That's like the bottom linehere.
And we went down like a rabbithole of different like scenarios
and situations, and it reallybrings up, you know, just just
thoughts on that.

SPEAKER_00 (53:57):
Unless they execute the section seven, they they do
have a way out.

SPEAKER_01 (54:01):
Then it's the consonne, though, right?
So it's one of the two, right?

SPEAKER_00 (54:05):
Yes.

SPEAKER_01 (54:06):
And and the thing that the way this was explained
to me when I first got into theindustry was at the end of the
day, somebody owned something,somebody used effort and money
and time to move it.
The person that owned that goodsbenefited, the company that
moved it provided the service.
It doesn't matter what any ofthe paperwork says, who money
changed hands, or what anybodydid in between, at the end of

(54:28):
the day, if the company thatmoved it didn't get paid, the
company that benefited fromhaving it moved is responsible,
right?

SPEAKER_03 (54:34):
Like, is that a fair summary of the I think I think
that's a very fair summary ofthe the policy argument, yes.
You know, you you've got acarrier that has spent time,
money, uh and you know, costlabor, uh miles on the road to
haul this product.
Shipper, you got your productshipped, you got everything you

(54:57):
asked for.
Uh it's not fair to to stiff acarrier uh in that situation.

SPEAKER_05 (55:04):
You get you before we recorded, we're recording
here, you brought up you triedto compare it to like
construction and subcontractors.
Can you can you kind of paintthat picture of how it would
look in a different just adifferent industry so we could
take ourselves out oftransportation and see it from a
different perspective?

SPEAKER_03 (55:21):
Yeah.

SPEAKER_05 (55:22):
The concept at least.

SPEAKER_03 (55:23):
Right.
Um so in in this case, let'ssee.

SPEAKER_05 (55:32):
Is this like if I if I build a house and I hire a
general contractor to build thehouse, and that general
contractor subcontracts, youknow, a dozen different subs,
and one of the subs doesn't getpaid, they can come back to me.
Right.
That's correct.

SPEAKER_00 (55:49):
As long as they sent you a a notice of intent to file
a lien and eventually file alien, they can preserve their
right to go against you.

SPEAKER_04 (55:56):
Gotcha.

SPEAKER_00 (55:58):
But that it is it is similar to that, but carriers
don't have that that need tofile the lien unless they're
doing construction work ormineral liens.

SPEAKER_04 (56:09):
Gotcha.
Interesting.

SPEAKER_00 (56:10):
But it it is an issue of equity and that the law
recognizes that benefit for thecarriers, and the same thing
with the subcontractors.

SPEAKER_03 (56:20):
All right, so always always explain it this way.
Like, Nate, you hire me to mowyour lawn.
Uh I go out and mow your lawn,but then you pay Christina, you
say here's fifty dollars forEdgar.
You go pay Edgar to to to uh formowing my lawn.

(56:43):
Uh Christina runs off with themoney.
Well, you still owe me, Nate,for mowing your yard.
That's a very simplified way toput it.

SPEAKER_05 (56:53):
All right, so we And I think that makes so much sense
too.
Like I'm gonna use that analogy.

SPEAKER_03 (56:58):
Kind of like kind of makes brokers look uh look bad
in that essence, but I meanthat's the simple that's how I
explain it to like my kid.
Yeah.
No, that's good.

SPEAKER_05 (57:09):
That's good.
So Chris kind of gave her her anher opinion on like when to uh
go the collections route.
I'm I'm kind of curious, Edgar,just to wrap it up from your
perspective, if a carrier'scoming to you, you you said you
don't work with brokers, or doyou or do you work with brokers?

SPEAKER_03 (57:27):
We represent some brokers, yeah.
Okay.

SPEAKER_05 (57:30):
So if a broker or a carrier is gonna come to you and
say, hey, I've got you knowthese$100,000 in unpaid invoices
um from these various differentshippers or customers of mine,
at what point would you advisethem, yeah, we're gonna we want
to go the league, you shouldprobably go the legal route of

(57:51):
trying to recoup the money here,versus no, um, try to work it
out at a lower level becauseyou're gonna burn the
relationship.

SPEAKER_03 (57:59):
Is there like a general rule of thumb?
Um generally I would recommendgoing the collections route,
such as Baxter Bailey andAssociates, uh, because they can
do it a lot cheaper uh first.
Um and you know they're able todo the the early legwork and
figure out you know whichparties are potentially liable.

(58:21):
Uh there will be some initialcommunications with the parties,
you know, before it gets uhelevated uh for me to to get
involved and file suit.
Um, you know, that would be theinitial steps.

SPEAKER_05 (58:39):
Um and then can you figure out what can you on that
note can you kind of explainjust in simple terms what what
happens behind the scenes on thecollection side and then what
happens on the filing suit side?

SPEAKER_03 (58:54):
Yeah, on the collection side, you know,
they'll there'll be an initialintake where the carrier has to
submit all of their uh documentsrelated to the load or loads
that they're not paid on.
Uh generally the collector willfigure out if uh there's any
bond money, if there's a bond tofile on, that that will happen.

(59:17):
Um at that point, we there's areach out to the broker.
A lot of times that broker hasflown the coupe and you know
they're they're out of business.
Um that will be researched, whatyou know, what debts the broker
has.
You know, in a larger collectionagency like Baxter Bailey, there

(59:40):
will be some precedent usuallyum that they've worked with the
parties in the past, even a lotof brokers, you know, that we
have relationships with.
Uh so we can reach out to uhwhat we call the lead broker,
which is usually a legitimatebroker and say, hey, what you
know what happened here?

(01:00:00):
Um is this one you you want toresolve?
And a lot of times, you know, wethose those get resolved within
weeks.
And and that's ideal foreverybody if that happens.
And sometimes it doesn't, andthen a letter will be sent to
the shipper and the consonantwhich elevates it further.

(01:00:21):
That's like, you know, moreelevation.
If if it doesn't get resolved,there will be usually some
emails and calls with theshipper and or consinee.
If everybody um says, you know,go bite dust to the collector,
then that's when it comes to me,and I have to decide whether

(01:00:41):
we're going to file suit on itand send it to someone like
Christina or or you know, dowhat we will with it.
Um and at that point uh usuallyanother demand will go out from
either me or Christina and givethem one more shot uh to
collect.
If not, then you know thecomplaint's filed and then you

(01:01:05):
get into full-blown litigation,which is costly and um usually
doesn't benefit a whole lot ofparties, but I would imagine it
probably doesn't get that far inmost cases, though, right?

SPEAKER_05 (01:01:19):
I'd say not.
I'd say just because of how muchit costs, right?
Like I can't imagine a shipperwho's very clearly owes the
money is gonna be like, we'regonna go fight this.
We're not paying you.

SPEAKER_02 (01:01:28):
Yeah.

SPEAKER_03 (01:01:28):
Yeah, and you know, the shipper has defenses.
I mean, like, as we talkedabout, you know, they can argue,
you know, uh, we signed sectionseven, or or or there's an
estoppel argument that is reallynot very effective, but just
flat out, we've already paidthis.
Um you know, courts generallyreject that these days, um, but

(01:01:52):
it has been attempted.
They call it legally, it'scalled a stoppel.
It's basically saying we pay wepaid this once, we shouldn't
have to pay again.
Gotcha.

SPEAKER_05 (01:02:01):
Ben, you got any things you want to ask before we
wrap up?

SPEAKER_01 (01:02:05):
One last question I have that I again, it's more
just a curiosity, and we don'tdefinitely need to go down a
rabbit hole.
But I am curious with is fraudas prevalent as it is.
Are you ever seeing instanceswhere somebody's coming to you
and saying, We're owed all thismoney, and they actually didn't
move the freight just to be ableto get a shipper or a broker to

(01:02:26):
pay them?

SPEAKER_05 (01:02:26):
I have had that happen numerous times where like
carriers they're like trying tobe like, oh no, we hauled this,
and we find out once we're like,yeah, we need an ELD download
and all this, and then they justdisappear.
But like I've had that happennumerous times.

SPEAKER_03 (01:02:39):
Yeah, and we take steps to vet our own clients
because of that.
You know, we we make sure thatthey did haul the load.
I mean, that's why we asked forELD lugs and and all that.

SPEAKER_01 (01:02:49):
There's yeah, because I'm like, if there's a
way to steal money, someone'strying to do it in the supply
chain at this point in time.
And I'm like, just in the backof my mind, I'm like, I feel
like somebody's probably outthere also trying to do this.
Like, oh hey, that brokerage isgoing out of business.
I got a bunch of bills ofleading here.
Okay, we're just gonna starttrying to file claims against
people.

SPEAKER_05 (01:03:05):
Yeah, it does happen.
And that's where uh to thebroker community out there, uh,
because it's happened to mycompany numerous times.
If a carrier comes at you andsays, like, I'm the one who
actually hauled this, you likerespectfully challenge them and
ask for the appropriate things.
Because it could be correct,right?
If you failed to vet yourcarrier and and all that

(01:03:27):
properly, you might have gotstooped and got double brokered.
But there are as there's alsothe chance, like Ben said, if
there's a chance if there'sscams happening out there,
someone's probably out theretrying to stick their hand in
the pot too and and have somebroker foolishly pay two trucks
because they wanted to not haveit go to their customer.
Because that's what happened, isthey they came to us and they're
like, We're gonna go to yourcustomer and demand this and

(01:03:49):
you're gonna lose them, blah,blah, blah.
And we're like, we're like, hey,we we want to pay you, we'll pay
you, but like please provide usthe following things to prove
that you were the carrier, andthey quickly just you know
disappeared.
So there is there is that ammo.

SPEAKER_00 (01:04:05):
Where it was a factoring company and they
purchased multiple invoices fromthis broker, uh and it
apparently they their carrierdidn't haul any loads, and they
replicated uh those invoices andthose uh rate confirmations
using just information thatwasn't accurate.

(01:04:28):
And when I went against theshipper and the consumer saying
those loads aren't ours, and thebroker said that's that's not
those are not valid rateconfirmations.
So it was all done by thecarrier and it was done against
a factoring company.

SPEAKER_05 (01:04:43):
Oof.
So they they duped the factoringcompany on that one then.

SPEAKER_00 (01:04:47):
Yes.

SPEAKER_01 (01:04:48):
Woof.
I've seen those, and I was alsoreally kind of surprised the
more I've worked with factoringcompanies, that of what
information like they areverifying and what they're just
taking for granted, to yourpoint, where it's just like, oh,
all these loads happened.
We funded all this money basedon just ratecons.
You're like, you can just createa rate con out of any system, it

(01:05:09):
is not a legal document, there'snothing else along with it.
And like, you're just fundingtens of thousands of dollars
based on what this TMS sent you.
Like, because literally likeNate had an agent, we talked
about another episode that hadthere was some fraud in related
to like weren't they likeillegitimate loads where they
were like paying a carrier theyknew or something that was
created invoices years ago?

SPEAKER_05 (01:05:30):
This is a couple years back.
Yeah, basically, like had allthese, you know, they weren't
even real loads.
He just the bunch of loads werecreated in our system, and he
booked uh, you know, booked alegitimate trucking company in
our system and then created allthese EFS checks, and the EFS

(01:05:51):
checks were cashed by his son.
So like to the tune of like$200,000.
And that's uh he's under it'spart of a larger organized crime
ring, and there is, I mean,agent fraud is a whole nother
conversation, but yeah, likethere's unless you protect
yourself as a business owner andbrokerage, like there's a lot of
ways that you're you're you knowvulnerable vulnerable from like
different agents.

SPEAKER_00 (01:06:13):
To the broker and confirm those votes are accurate
and that they're gonna get paid.
That's that's something prettysimple to do.
And in this case, my clientdidn't do it, and they're
they're off a couple of hundredthousand because of that.

SPEAKER_05 (01:06:29):
Alrighty.
Well, we'll have to do anotherepisode with you guys where we
talk about something positivethat can uh yeah, you know, we
got some some good stories,right?

SPEAKER_03 (01:06:39):
So we could go on for hours, but yeah.

SPEAKER_05 (01:06:43):
Well, cool.
Edgar, it's good to meet you andhave you on the show today.
And Christina, pleasure to haveyou back again.
Um, Christina, anything you wantto wrap up with?

SPEAKER_00 (01:06:51):
Oh, just letting everyone know we're here in
Texas and we're available forconsultation.
If you want to get your freightbills paid, just reach out to
me.
And if you're nationwide and youyou have Baxter Bailey there to
help you as well.

SPEAKER_05 (01:07:08):
Awesome.
Yeah, we've got your uh we'vegot your website in the show
notes too.
So make sure to to check thatout.
And Edgar, anything you want towrap up with?

SPEAKER_03 (01:07:18):
No, uh, like Christina said, you know, if you
have unpaid freight charges orany issues collecting, you can
go to Baxter Bailey andAssociates.
Uh, you can go to my website,DavisonLawfirm.net.
I have a blog that has a lot oflegal information on it.
Um, and that's D-A-V-I-S-O-N lawfirm.net.

SPEAKER_05 (01:07:41):
Yeah, we'll throw a link in the show notes for yours
too.
That's a good point.

SPEAKER_03 (01:07:44):
Yeah, it it there's a lot of articles on there
that's very helpful um for whatwe're talking about today.

SPEAKER_05 (01:07:52):
So awesome.
We appreciate that.
And thanks again, both of you,for being on.
Ben, final thoughts.

SPEAKER_01 (01:07:57):
Whether you believe you can or believe you can't,
you're right.

SPEAKER_05 (01:08:01):
And until next time, go bills.