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Learn how to avoid double brokering in the transportation industry
Somerset Logistics
Learn how to avoid double brokering in the transportation industry
Double brokering is an illegal and unethical practice that is becoming increasingly common in the transportation industry, creating many risks for freight brokers and carriers. Let’s explore what double brokering is and how to avoid it.
Double brokering is an illegal practice that occurs when a fraudulent motor carrier accepts a load from a freight broker, then re-brokers the load to a legitimate motor carrier to actually haul the freight. This unethical scam is conducted without the knowledge of the shipper, the freight broker or the hauling carrier. Several risk factors come with the double brokering process, which are costly and detrimental to freight brokers and carriers.
The scam of double brokering presents many issues – the shipper’s freight is at risk as the load in transit may be uninsured or stolen, the actual carrier hauling the load will not receive payment by the fraudulent carrier, and the freight broker is left in the middle to sort out the complications on both sides.
When a load is double brokered, the freight broker loses control of their customers’ freight. The freight is exposed to potential liabilities and risks the customer never agreed to. The freight broker is unaware of who is hauling the load or if they are properly licensed and insured to transport the freight. If the freight is damaged or stolen during transit, there will be serious complications for all parties involved to determine who is liable and on the hook for the costs, oftentimes which falls on the freight broker to sustain the relationship with their customers.
The fraudulent carrier will invoice and collect payment from the freight brokerage, without any intention of paying the actual carrier responsible for transporting the load. Therefore, the freight broker is left with the responsibility of also paying the hauling carrier – leaving the broker to pay out twice on the same load.
There are several measures you can take in your carrier vetting process to avoid double brokering. Here are a few tips to help prevent double brokering:
At Somerset Logistics, our carrier onboarding system has strict benchmarks a carrier’s qualifications must meet, which in turn mitigates the potential for unwarranted and unnecessary issues, such as double brokering. We also have a team of professionals dedicated to assisting our agents by reviewing and vetting carriers to ensure they meet industry standards.
Somerset Logistics is a trusted freight broker with more than 25 years of experience in the industry. Feel free to submit a form online for a freight quote or call 615.907.8558 to get a quote over the phone.
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