How to spot double brokering (and how to address it)
Double-brokering refers to a risky practice in which the shipper hands off their load to a broker, understandably expecting it to be passed on to their carrier. However, instead the broker hands the shipment off to a secondary broker, usually without the consent of the original shipping party. This is considered highly unethical. Freight brokers sometimes engage in this because they find themselves in a complicated situation or have made a mistake somewhere. Double-brokering is also looked down upon due to the fraudulent activity that occurs in the logistics industry. In the last few years there has been a rise of the secondary broker disappearing and ultimately stealing the carrier's pay. This form of double-brokering is illegal and described in the eyes of the law as theft of services, potentially leading to serious fines and even prison sentencing. This is very different from co-brokering, which is done legally, with consent, and with open channels of communication between the involved parties. The two brokers who have partnered up will then split the profit afterwards.
It is important to know how to spot a broker you cannot trust! Does your rate seem too good to be true? Go down this list, and make sure it's not!
Do a background check and make sure your broker is who they say they are. Check their credit score and their FMCSA registration. Look for the number on their file and ensure that your load really came from that broker and not someone posing as them. Call the broker directly to confirm details instead of ignoring your suspicions. Although Carrier44 is known best known for carrier safety ratings, they also have ratings for freight brokers as well.
Develop a trustworthy network
One way to avoid being scammed by dishonest brokers is to work with parties that you know and trust. Work on building a network with brokers that have been transparent in their dealings with you and keep you satisfied. By having these relationships with brokers you are familiar with, you can avoid having to rely on unfamiliar brokers that may not respect your trust.
Review rate confirmation
After your load has been booked, carefully read over your rate confirmation. If the rate con requires you to check in as a different carrier than you actually are, chances are high that you are dealing with a double-brokered load. Keep an eye on the paperwork and make sure the bill of lading matches the rate confirmation at pick-up.
There is also cause for suspicion when a load has an unusually high rate, especially if they also insist their POD be sent to a random email right after it has been delivered. While some brokers feel that they can get away with this practice, shifting laws in recent years have increased legal penalties to help protect the carrier companies that are negatively affected by this. Protect yourself as much as you can, and be mindful when choosing a new broker for your future shipments.
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