Transportation Business Resources

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The host (Dooner) of “What the Truck?!?” appears sitting behind a desk. The background consists of decorative wood with red and blue accent lighting. The host is shown speaking.

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DOONER: Speaking of vetting and speaking of carrier vetting and all of those things, we are happy to bring Scott Cornell from Travelers back onto the show. He's their transportation lead, and crime and theft specialists. We're going to talk a little bit about how freight brokers should be properly vetting their carriers. Scott, thanks for joining us today.

SCOTT CORNELL: Hey, guys. Good to talk to you again.

DOONER: Yeah, no. Hey, it's the first time catching up in 2021, so I think we're going to reset the table a little bit and talk about how we go about at the source. Right at the source, how do you go about vetting carriers and the importance of that. Can you shed a little light on it?

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A static image of guest speaker Scott Cornell’s headshot appears.

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SCOTT CORNELL: Sure. I'll give you the short and then a little bit longer answer, all right? The number one rule and the short answer, which sounds very basic, is you really have to know who you're doing business with. You have to make sure that you are thoroughly vetting and verifying the identity of anybody that you're going to consider a business partner, you're going to work with those. That's the short answer. It's very high-level, but the details behind that have a little more meat to them. Today we're going to concentrate on freight brokers, but that rule generally applies to anybody, shippers, carriers, truck drivers too, you name it.

Speaking in general terms, people tend to trust and assume that the information that people are sending us is accurate. And most of the time it probably is, but it only takes one time for it to be wrong and that one time can be expensive. We recommend things like going to the actual website of the company that you're vetting and calling the phone number that they have listed, not just taking the phone number that is sent to you via email or that they call from. But actually go to the website, call that number that's on their official website and confirm via that number, that the person that you're talking to works for that organization, that they are in the position they claim to be in, that they represent that, and they have the ability to authorize the transactions on behalf of that company.

Yeah, these examples are kind of high-level. When we work with our clients to teach them how to vet, we create more of a step-by-step plan, but those are some pretty basic things that we see sometimes people will skip over. Then once you verify the legitimacy of that business partner, you also need to vet their insurance and make sure that they have the coverages that you need. While a freight broker is less likely to be liable since they don't physically handle the goods, experiencing a loss can jeopardize a relationship for them with their shippers. Additionally, there are other ways freight brokers can find themselves in an unfavorable position if they fail to make sure that the partners have the right insurance coverage. Some policies have exclusions. They can be for very specific things, right down to the commodity level. If we use an example, if you're brokering out a load of seafood for a company that doesn't have coverage, or has a specific exclusion for frozen seafood, that's going to be a problem.

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The static image of Scott Cornell’s headshot disappears. The co-host (Michael Vincent) appears sitting behind a desk. The background consists of decorative wood with red and blue accent lighting. The host is shown speaking.

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MICHAEL VINCENT: Yeah, it certainly can. When you're a broker, you're in this quasi responsibility thing. A lot of people jump into this and it's the less sexier part, right? You're going into getting the insurance and stuff, but it's incredibly, incredibly important. Can you go a little bit deeper into some of those exclusions or key coverages that a freight broker really needs to be on a lookout for?

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A static image of guest speaker Scott Cornell’s headshot reappears.

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SCOTT CORNELL: Sure. All insurance policies are not created equal and those that have a lot of exclusions or the absence of key coverages are boxing out your coverage are really good examples. Another exclusion beyond the commodity base is one that we sort of just discussed, which is voluntary parting. Voluntary parting is an exclusion that's intended to deal with things like a fictitious pickup, or an identity theft, or a double brokering scam. In a case like that, the freight broker is unaware that they're giving the goods to the bad guys or a thief, and so that may not be covered if you have that exclusion. Alternatively-

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SCOTT CORNELL: Go ahead. The absence of key coverages is something that freight brokers should be on the lookout for as well. If we take an example, since the FSMA updates came out, shippers might often require a carrier to have a broken seal coverage for perishable commodities. Many insurance companies don't offer that type of coverage, so as a result, the freight broker could be booking loads with a carrier that doesn't have this kind of coverage in their policy. If they don't have that and there is a loss, then the freight broker may end up picking up that claim with their contingent coverage, if they have contingent coverage, just to save the relationship between them and their shipper. When you talk about possibly boxing in of the motor carrier's coverage, it’s something else that freight brokers will want to take a look at and make sure that they're avoiding.

Scheduled vehicles are a good example of this, where only specific vehicles listed on a policy are covered. You want to make sure that if you're the freight broker moving that load with them, that one of those vehicles is the one that you're putting your freight with. Sub limits are another good example, which is a type of coverage limitation that refers to the value of what's being shipped. It's important to pay attention to any sub limits and make sure you prevent booking a load through a carrier that's not insured for the total value of the load that you're trying to book. Freight brokers are going to want to compare any requirements provided by the shipper to the motor carrier's policy specifically, and select a motor carrier partner that's able to provide the right coverage in that kind of a place. It does require a few extra steps to do your due diligence, but it can potentially save you from a big loss or a hassle in the long run.

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The host (Dooner) reappears sitting behind a desk. The background consists of decorative wood with red and blue accent lighting. The host is shown speaking.

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DOONER: Yeah, absolutely. Scott. People, they want to vet their carriers, they want the help of Travelers. Where do we send them to?

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A static image of guest speaker Scott Cornell’s headshot reappears.

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SCOTT CORNELL: With all these best practices in place, a loss can still occur. It can just happen, so what can freight brokers do when that happens? For cargo theft, we've talked about that in the past, the three of us, the chances of recovery significantly decrease after 48 hours after the event. That can be particularly challenging for freight brokers because they're relying on the motor carriers to communicate timely and quickly when a theft happens. Something to consider as a freight broker if you have a loss, what resources are at your disposal? If it's a theft, who's going to help you look for that stolen cargo? It's a different kind of loss. What other resources does your insurance partner offer you to mitigate that loss? At Travelers, we have services. We have our special investigations group, our Risk Control team, our Claim team, you name it. We're very specialized, and for more information on that, you can go to travelers.com/transportationresources.

DOONER: Thanks, Scott.

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A split screen appears showing the video of two “What the Truck?!?” co-hosts side-by-side. The man on the left (Dooner) is shown speaking.

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DOONER: We got to call Tim Francis, he's the enterprise cyber lead right out of West Simsbury, Connecticut. And he works for Travelers. We'll bring him up on the line and just a minute here. Ring, ring, ring. Hi, Tim.

TIM FRANCIS: Hi, how are ya?

DOONER: Hey, what's going on? Thank you for joining Dooner and The Dude on “What the Truck?!?” today.

TIM FRANCIS: Happy to be with you. Thanks for having me.

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The screen expands to show only the one host who is speaking.

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DOONER: Hey, I was looking into something. You are a University of Maine Black Bear alumni. That's also home to Stephen King, who as you know, tells a lot of scary stories in the dark. Well, cyber risk, another scary story. And that's your point of expertise. Can you talk a little bit about this cyber risk and what kind of risks exist for transportation companies? Michael Vincent, I will tell you on this show, we've been covering a lot, too many, stories recently.

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A static image appears of the guest speaker, Tim Francis’ headshot.

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TIM FRANCIS: Yeah. I mean, it's, it is a scary world that we're living in relative to cyber exposure. Transportation companies are no different. Any number of things can happen. What tends to be happening right now is really one of two things. It's either social engineering where people are using computers and data and they're getting in and pulling somebody at the organization into sending money out or paying an invoice that the money's going to the wrong place, or often it's ransomware, right? Bad guys are getting into the system. They're encrypting computers and virtually average system that connects. And they're extorting millions of dollars off them. If you don't pay a lot of money, pay it in Bitcoin, you don't get your computers back. You can't send your freight where it needs to go. You can't track where your trucks are, any of that kind of thing.

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The static image of Tim Francis’ headshot disappears, and the split screen video of both “What the Truck?!?” hosts reappears. The man on the right (Michael) is shown speaking. The screen then expands to show only the host who is speaking.

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MICHAEL VINCENT: Yeah. A lot of times your financial loss from not paying it is less than paying that ransom is what they're betting on. And you'll just pay that stuff. Yesterday I got a call and was told that there was nefarious activity concerning my social security number. And therefore my social security number had been suspended along with any rights I may have with it. And I should press number one to talk to a supervisor. What I did was I didn't press number one and I hung up. How do transportation companies protect themselves against these threats?

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A static image of Tim Francis’ headshot reappears.

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TIM FRANCIS: Well, that's actually perhaps number one, right? And so first and foremost is have a culture from the top down that data security, computer security is important and train your employees on why it's important and how to avoid it, right? So that they're trained, "Hey, don't press number one. Don't make your password one, two, three, four." Those are really super, super basic. But if you're not starting with the basic, you can't help but be vulnerable.

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The static image of Tim Francis’ headshot disappears, and the split screen video of the “What the Truck?!?” hosts reappears. The man on the left (Dooner) is shown speaking.

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DOONER: Yeah. So what are some of the things that companies can be doing to prevent a cyber event for happening? Because they're getting attacked on a lot of fronts, aren't they?

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A static image of Tim Francis’ headshot reappears.

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TIM FRANCIS: They're attacked in a lot of ways and it's no longer quote-unquote the Nigerian Prince email that says send me money, which you should be able to spot a mile away. These are much more sophisticated attacks, much harder to recognize as being from a bad guy as opposed to a good guy, much more likely to get into your system in ways that you're not protecting. And once they're in, they can move across the network and really essentially own your organization. So it's still though the basic blocking and tackling. Having a culture, as I said, making sure that you're educating employees. And once you get there, then it's also making sure you have the right cybersecurity. So, often what we're suggesting is using multifactor authentication. So having a couple of ways to verify that the person who is in the system is in fact, an authorized user and not a bad guy.

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The static image of Tim Francis’ headshot disappears, and the split screen video of the “What the Truck?!?” hosts reappears. The man on the left (Dooner) is shown speaking.

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DOONER: So how can Travelers help protect companies? I mean, obviously there's just the best practices. Some of the things have to start inside the house, right? Not opening nefarious emails, not pressing one like Michael Vincent did and getting his social security number stolen. What are some other ways that Travelers can help other than just basic education on the fundamentals?

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A static image of Tim Francis’ headshot reappears.

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TIM FRANCIS: Sure. Well, I mean, I'm here. You're having me on because I work for an insurance company, right? And so you can do all of those things right and still be a victim. So, so number one, have a cyber insurance policy, right? We sell insurance policies to help protect organizations, transportation companies included. So if they have an event there's a financial backstop that can help pay for the cost.

But more than paying for the cost like you would with traditional insurance, particularly with cyber, I think it's critical to have access to the group of vendors and experts that we have, so that if you suffer an attack, we can bring people in that will do the forensics, figure out how somebody got in. What did they see? What didn't they see? If it's for example a ransomware event, there's people that we will use that will negotiate that ransom. If you had to get to that point where ransom payment was going to be considered there're groups that we have that can do that, where absent having a cyber insurance policy I would doubt that a lot of the folks in the transportation industry wouldn't know where to turn, if something like this occurred.

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The static image of the Tim Francis’ headshot disappears, and the split screen video of the “What the Truck?!?” hosts reappears. The man on the right (Michael) is shown speaking.

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MICHAEL VINCENT: Yeah. That's excellent stuff. Do you think that eventually this is something that could happen where the insurance is there and so that it encourages this to happen or how do we deter this?

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A static image of Tim Francis’ headshot reappears.

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TIM FRANCIS: Yeah, no, I think it takes a broader solution than that. And I would say regardless of anybody's opinion on the insurance side of this, if cyber insurance didn't exist or went away tomorrow, bad things are still going to continue to happen against transportation companies and other companies, ransomware included. So I don't think insurance is necessarily the issue here. I do think it's increasing the level of security within organizations has got to be the first point of defense and raising the bar on the standards that really all companies have. It's just frankly too easy right now for threat actors to take advantage of vulnerabilities that exist. And so they're doing so.

DOONER: Tim, where would you recommend people go to get more information about cyber risk? Where should they go on Travelers and what kind of resources are you providing?

TIM FRANCIS: Sure. Well, they can go to travelers.com and then from there, you're a couple clicks away from getting into content related to cyber insurance and cybersecurity best practices. But for all of our policy holders beyond what you might normally see typically in a website, we provide access to best practices. We provide access to ... All of our cyber customers can have access to what we call a breach coach security line so if they have an event they can call immediately 24 by seven, 365 into a hotline. If they have general security questions, we have partnerships with cybersecurity experts they can call and for free of charge get questions answered on best practices. I mentioned multifactor authentication. If you don't know how to do that, we can put you in touch with people that will help walk you through those basic steps and get it secure for you.

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The static image of Tim Francis’ headshot disappears, and the split screen video of the “What the Truck?!?” hosts reappears. The man on the left (Dooner) is shown speaking.

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DOONER: Tim. Thank you so much. We appreciate your time today. Have a great weekend and thanks for some insight on this problem that only seems to be growing.

TIM FRANCIS: No problem. Have a great weekend.

DOONER: Take it easy.