CTB Carrier Selection & Risk Management 5

Question 1

A broker is approached by a new carrier offering rates 30% below market for refrigerated freight. What is the most important risk red flag in this scenario?

Accepted Answer

Extremely low rates may indicate the carrier lacks proper reefer equipment, insurance, or intends to engage in fraud

Answer

Rates significantly below market often signal inadequate equipment, lapsed insurance, inexperienced drivers, or fraudulent intent — all serious risks for refrigerated/temperature-sensitive loads.

Question 2

Under the Carmack Amendment, a carrier's liability for cargo loss or damage is limited unless the shipper declared a higher value. Who bears the burden of proof to collect a claim?

Accepted Answer

The shipper/claimant must prove the cargo was in good condition at origin and damaged at destination

Answer

Under the Carmack Amendment, the claimant must establish a prima facie case by showing good condition at origin, damage at destination, and the amount of loss.

Question 3

A carrier's Certificate of Insurance shows cargo coverage of $100,000 with a $25,000 deductible. For a shipment valued at $110,000, what is the carrier's maximum net coverage after the deductible?

Accepted Answer

$75,000

Answer

The policy limit is $100,000, reduced by the $25,000 deductible, leaving a maximum net payout of $75,000 — $35,000 short of the full shipment value.

Question 4

What is the significance of a carrier's 'new entrant' status with FMCSA?

Accepted Answer

New entrants are in an 18-month safety monitoring period with heightened audit risk and limited inspection history

Answer

New entrant carriers operate under a mandatory 18-month monitoring period and must pass a safety audit within 12 months; their limited history makes risk assessment more difficult for brokers.

Question 5

Which action best demonstrates a broker's 'due diligence' standard of care when selecting carriers to minimize negligent selection claims?

Accepted Answer

Maintaining a documented, consistent carrier vetting process that checks authority, safety ratings, and insurance before every load

Answer

Courts evaluate negligent selection claims by examining whether the broker followed a consistent, documented process — sporadic or undocumented vetting is insufficient as a defense.

(CTB) Certified Transportation Broker Practice Test

(CTB) Certified Transportation Broker Practice Test

CTB Carrier Selection & Risk Management 5