CTB Ethics & Business Communication Practices 2 — Questions and Answers
Question 1: A freight broker discovers a carrier they regularly use has had two at-fault accidents in the past year but hasn't disclosed this. What is the broker's ethical obligation?
- Continue using the carrier since the incidents are not publicly reported
- Immediately discontinue using the carrier and inform past shippers of the risk
- Review the carrier's safety record and make an informed decision about continued use (Correct answer)
- Report the carrier to the shipper only if a third accident occurs
Correct answer: Review the carrier's safety record and make an informed decision about continued use
Brokers have a due diligence obligation to vet carrier safety records and make informed decisions that protect shippers.
Question 2: Under the TIA Code of Ethics, how should a broker handle a situation where a shipper requests that the broker falsify a bill of lading?
- Comply if the shipper is a major account
- Refuse and explain that falsifying documents violates federal law and ethical standards (Correct answer)
- Consult with the carrier before deciding
- Complete the request but document the shipper's instructions
Correct answer: Refuse and explain that falsifying documents violates federal law and ethical standards
Falsifying a bill of lading is fraud; brokers must refuse such requests regardless of business relationship.
Question 3: What does 'double brokering' mean in the transportation industry and why is it considered unethical?
- Using two carriers on a single lane to compare rates
- A carrier re-brokers a load to another carrier without the shipper's knowledge or consent (Correct answer)
- A broker negotiates rates with two shippers for the same truck
- Having two brokers manage the same account simultaneously
Correct answer: A carrier re-brokers a load to another carrier without the shipper's knowledge or consent
Double brokering occurs when a carrier secretly re-brokers a load, creating liability gaps and violating the original brokerage agreement.
Question 4: A broker is emailing a shipper about a service failure. Which communication practice best reflects professional ethics?
- Minimize the issue to avoid alarming the shipper
- Provide a factual account of what occurred, the impact, and corrective steps taken (Correct answer)
- Blame the carrier entirely and avoid mentioning the broker's role
- Wait until the shipper notices before addressing the issue
Correct answer: Provide a factual account of what occurred, the impact, and corrective steps taken
Transparent, factual communication about service failures with corrective actions demonstrates professional accountability.
Question 5: Which of the following best describes a conflict of interest that a freight broker must disclose?
- Using a preferred carrier who offers competitive rates
- Owning a financial stake in a carrier being recommended to shippers (Correct answer)
- Negotiating with multiple carriers for the same lane
- Setting different rates for different volume shippers
Correct answer: Owning a financial stake in a carrier being recommended to shippers
A financial interest in a recommended carrier creates a conflict that must be disclosed so shippers can make informed decisions.
Question 6: A shipper asks a broker for a written quote that expires in 48 hours, but the broker verbally agrees to hold the rate for a week. What is the ethical course of action?
- Honor the verbal agreement and issue a written confirmation reflecting the week-long validity (Correct answer)
- Enforce only the written 48-hour quote since verbal agreements are unenforceable
- Ignore both and renegotiate when the load is tendered
- Charge the shipper a fee to extend the rate
Correct answer: Honor the verbal agreement and issue a written confirmation reflecting the week-long validity
Honoring verbal commitments by issuing corrected written documentation reflects integrity and professional ethics.
Question 7: What is the primary purpose of requiring freight brokers to maintain a surety bond or trust fund under federal regulations?
- To generate revenue for the FMCSA
- To protect carriers and shippers from financial losses due to broker non-payment or misconduct (Correct answer)
- To ensure brokers carry cargo insurance
- To limit the number of brokers operating in the market
Correct answer: To protect carriers and shippers from financial losses due to broker non-payment or misconduct
The $75,000 surety bond or trust fund requirement protects carriers and shippers if a broker fails to pay or engages in misconduct.
CTB Ethics & Business Communication Practices 2
A freight broker discovers a carrier they regularly use has had two at-fault accidents in the past year but hasn't disclosed this.
What is the broker's ethical obligation?