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.
What Is Double Brokering?
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 Implications of Double Brokering
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.
How to Avoid Double Brokering
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:
Properly Qualify the Carrier
- How long has the carrier been in business? It is only a matter of time for a fraudulent carrier scam to be discovered and reported. We recommend avoiding the use of any carriers that have had their authority for less than 90 days.
- Confirm the phone number they are calling from matches the phone number listed on the Federal Motor Carrier Safety Administration website, SAFER. Call the number listed on the FMCSA site to confirm the person wanting your load is legitimate.
- Are there any reports on this carrier, such as FreightGuard reports? Oftentimes, fraudulent carriers are reported for unethical business practices in an effort to prevent other freight brokers from falling victim to such scams.
- Is the carrier requesting quick-pay? The majority of double brokers request quick-pay to receive payment as quickly as possible before their scam comes to light.
- Has the carrier had multiple address changes? Is their address a physical location? If the carrier has had multiple address changes over a short period of time, this could be a red flag. Ensure the address on file matches the
FMCSA record and is an actual location.
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.
Work with Trusted Brokers at Somerset Logistics
Somerset Logistics is a trusted freight broker with more than two decades 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.