Steve Talamo and Clint Abernathy run Cleve’s Logistics, a two-truck fleet serving the ports in South Carolina with just a few years of authority behind it. As such, when they play on the spot market, they’re subject to brokers’ “carrier vetting” craze<\/a>\u00a0— judged by circumstances out of their control, like how many roadside inspections they’ve received<\/a>\u00a0(none in Cleve’s\u00a0case for the last two years).\u00a0\u00a0<\/p>\n That’s been the experience of untold numbers of owner-operators and other small carriers recently, but unlike most, when Cleve’s Logistics gets vetted by a broker, they fire right back with vetting of their own using the FreightValidate service.<\/p>\n FreightValidate, founded by freight fraud vigilante and self-described “worst critic” of the Federal Motor Carrier Safety Administration<\/a> Dale Prax, offers both brokers and carriers a somewhat unique approach to potential-freight-partner vetting.\u00a0<\/p>\n Prax said he specifically tailored the platform to owner-operators too busy behind the wheel to run sophisticated vetting operations. According to the company website, it “uniquely combines advanced technology with deep industry knowledge, a thorough understanding” of the regulatory code, and its legislative underpinning. Unlike some other services that purport to grade entities with algorithms after scraping publicly available data<\/a>, FreightValidate attempts to “use objective, impartial, and factual data in our FreightValidation process — no predictive analytics, no guesswork, no hypotheticals. Just the facts.” \u00a0<\/p>\n Steve Talamo became one of the very first users of the platform after meeting Prax at the\u00a0Broker-Carrier Summit<\/a> in 2023.<\/p>\n “I would run into these shady brokers that weren\u2019t the lead broker on the load, and I couldn\u2019t really get any answers from them,” he said. “I started working with them, and their credit was kinda decent when you were trying to factor them, then immediately after a couple invoices, they drop to an F (credit rating)” and a real “struggle to get paid ensues.”<\/p>\n Since the pandemic, many owner-operators have experienced that same burn from\u00a0double brokers in the “take the money and run” phase of their evolution<\/a>. Once Talamo got burnt a few times, he vowed to fight back.\u00a0<\/p>\n [Related<\/b>: The double brokering slow burn — how it happens, and how to fight back against it<\/a>]<\/p>\n “There are some sketchy scumbags in this world,” he said. Since Talamo started using FreightValidate,\u00a0he’s now “dealing with a better class of people,” he added.<\/p>\n FreightValidate isn’t the only service that can pull a broker’s credit. They’re not the only one that flags bad addresses, a common trait of fraudulent carriers and brokers. It’s not the most widely used or well-known platform, either. What makes it different? In short, it’s Prax himself, who told Overdrive <\/i>he sleeps maybe three or four hours a night, and spends the rest of his time using his Marine Corps investigator training to manually audit thousands of FMCSA-regulated entities, looking for red flags that suggest fraud.\u00a0<\/p>\n [Related<\/b>: The criminal element lurking in FMCSA’s outdated registration system<\/a>]<\/p>\n Prax calls FreightValidate the “unofficial quality assurance department of the FMCSA.” While the agency itself hasn’t exactly endorsed that, they haven’t really argued with it, either, and Prax spends plenty time talking to them, both in private and in public. (Note the podcast episode reported on here<\/a>, likewise the presentation where Prax played a part at the most recent Broker-Carrier Summit.<\/a>)\u00a0<\/p>\n Prax didn’t win recognition from FMCSA with flattery; he’s been a fierce critic of the regulator’s oversight, or lack thereof, as freight fraud has exploded over the last few years. That reputation aside, he pitches to owner-operators his credentials as, effectively, one of them. He’s been a broker, sure, but also the “owner of a truck, owner of a trucking company” —\u00a0J&D Logistics out of Minnesota,\u00a0he said. For 32 years, Prax has “been in trenches,” as a broker and carrier. “I’m not some tech guy who says, ‘Hey, let\u2019s fight fraud,'” he said.\u00a0<\/b> Prax’s system, for both brokers and carriers, doesn’t focus on data like “how long you’ve been in business” to subjectively surmise “what you might do” now or in the future, he said, a common pitfall for carriers with a short history reflected in FMCSA’s system<\/a>. Instead, Prax said FreightValidate focuses on “objective data.” Such as answers to the question “do you claim to live at a post office?” <\/p>\n As previously reported, Prax since 2023 has been leading something of a charge against bad Principal Places of Business addresses used by entities in the federal system. Readers will recall his discovery of 250-some carriers at a single California address and hundreds more who filed their principal email contact as [email\u00a0protected]<\/span><\/a>.<\/i><\/p>\n [Related<\/b>: ‘WTFFMCSA’: Carriers mocking the agency through its own registration system?<\/a>]<\/p>\n FreightValidate checks FMCSA entity registrations against Secretary of State filings, and then looks for commonality between entities. Prax has uncovered a multitude of what he feels are red flags for potential fraud\u00a0— <\/b>people registering companies with their own names misspelled to obscure affiliations to other companies, dozens of companies with one phone number, and more.\u00a0<\/p>\n “Nine times out of 10 when someone sends me an MC to look into, it’s linked to 40 or more” other entities , said Prax.<\/p>\n Prax makes that manual labor available to everyone through FreightValidate’s integration with Apple’s Siri voice-assist function. A driver can\u00a0simply say, Hey Siri, check MC number XXXXX<\/i>\u00a0and get a report back. “That includes a credit report and an average number of days” for payment terms, too, he said.<\/p>\n According to Prax, “of the 300,000-some active carrier authorities, less than one percent have information that\u2019s inaccurate or incomplete or fake on their FMCSA profiles.”<\/p>\n Why? “Because carriers have been vetted since Carrier 411<\/a>” opened its doors almost 20 years ago.\u00a0<\/p>\n [Related<\/b>: Carrier411’s big changes to its ‘FreightGuards’ might open a legal can of worms<\/a>]<\/p>\n “Carriers are beat up and vetted all the time, but if you look on the broker side, there are 22,000 brokers active and 33% have either no information or false information — no one has ever vetted them,” said Prax. Imagine an owner-operator considering a “load for this guy who has no contact, no name, no phone number” in his brokerage’s official profile, said Prax. In a sense an owner-operator hauling a load for a broker is “a bank loaning them money,” he added. Merely hoping <\/i>they pay up is not an option.\u00a0<\/p>\n Knowing on a deep level if the broker has shady undisclosed affiliations with other entities, and if they usually pay and in what timeframe, put small fleet owner Steve Talamo in a better position, he said. He’s using FreightValidate “with every broker that would send me an email or who I saw on a load board,” he said. If he gets anything less than a green checkmark, FreightValidate’s symbol for a validated entity, “I would just stop and won’t proceed engaging with them.”<\/p>\n The result, he said, has been fairly dramatic. “As soon as I started doing that, I was getting real, true customers and better quality brokers. It saved me so much time to do that process, and now I have brokers that pay on-time.”<\/p>\n Brokers who clearly have no real clue about the realities of what they purport to be their own customer’s load have disappeared from his load-board interactions. “If I have a question they can give me answers,” said Talamo. “It’s not like they\u2019re stealing the freight from someone else. … We get a lot of double brokering in the drayage world.” Talamo’s still trying to collect a $2,400 invoice from 2022.<\/p>\n Ultimately, Talamo and Prax both admit that “someone can get through the cracks.” Prax hasn’t hand checked every single broker and carrier multiple times a day. Also, if a carrier or broker willingly sells their MC and associated phone and email<\/a>, that’s not going to show up immediately.\u00a0<\/b><\/p>\n Talamo’s not exactly landing a ton of new freight as a result of FreightValidate. The system “isn’t old enough that people know about it yet,” he said. That said, Talamo recently opened a brokerage division at Cleve’s Logistics, and has been using the platform as a selling point to shippers.\u00a0<\/p>\n In business development, there’s a concept called the “Iron Triangle.” It’s the notion that a\u00a0product can be good, fast, and cheap all at once, but it’s best to focus on two. Prax made a good product that works quickly, he said, but, “right now, it costs an owner-operator about $99 a month. I don’t like that number.”\u00a0\u00a0<\/p>\n But he hopes to further deliver value with FreightValidate. “I want to be in training and consulting and helping owner-operators,” he said. “We’re the only\u00a0<\/b>vetting company that caters to the truck driver and small carrier.” Part of his motivation: “Carriers don’t have the luxury of sitting behind a desk,” he added, particularly owner-operators. Try telling that to the broker who argued, in earnest, that real carriers on the end of a load the carriers didn’t know was double-brokered deserve the blame for the fraud<\/a>.\u00a0<\/p>\n Prax supports FMCSA’s move toward increasing enforcement of broker transparency<\/a>, noting it could be a fraud-fighting measure in how it reveals how brokers handle money earmarked for carriers.\u00a0<\/p>\n Meantime, he’s hopeful to get that $99\/month cost figure down, though admits he’s “dumped a ton of my own money into this.” Right now, he’s pitching the Owner-Operator Independent Drivers Association on including the service as a $10\/year add to their membership benefits\u00a0<\/b>and other ways to quickly scale the business and reduce service costs for users.\u00a0<\/p>\n [Related:<\/b>\u00a0More ways to vet brokers to combat fraud, double brokering<\/a>]<\/p>\n<\/div>\n![\"Made](\"https:\/\/mindful-org-rr.imgix.net\/workspaces\/default\/uploads\/2024\/11\/JBLFLIP6BLKAM.CpkYwcbYwm.jpg?crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&h=167&w=250&auto=format%2Ccompress&q=70\")
<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\nHow FreightValidate manually vets carriers and brokers<\/b><\/h2>\n
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Here’s what an owner-operator might see upon vetting Direct Expedite, Prax’s own brokerage. Note the credit score and payment terms figures.<\/span><\/source><\/picture><\/span><\/p>\nVetting unfamiliar freight brokers: Why it’s important<\/b><\/h2>\n