Protect Your Shipments From Double Brokering Scams

As though shippers didn’t have enough to worry about, a rising menace, double brokering, is increasingly plaguing the world of freight and shipping logistics. Shippers are at risk of having operations disrupted, costs inflated, and even having cargo disappear completely.  

What is a Double Brokered Load?

So, what’s double brokerage? It means that when a broker takes on a client, they actually use another broker to make the actual shipping arrangement. The original broker charges the client at one rate. Then, they find a secondary broker that will take it for a lower rate to profit from the difference. 

This would be the simplest form of double-brokering as an unethical practice. There are several other ways. Next, we’ll consider why such actions present both shippers and brokers with more trouble. 

Why is it a Problem?

A reputable broker takes time to build relationships with its partners and vet them carefully.

When a responsible broker places your freight with a carrier, they know where it’s going and are likely tracking it along the way. 

When double brokering occurs, the broker you hired doesn’t actually know how your freight is being shipped or even making sure that the trucking company is legitimate. This then results in plenty of lost and outright stolen freight. 

When shippers refuse to work with freight brokers, it leads to yet another set of problems.

Increased Costs

Among the biggest headaches are the increased costs involved. These might not seem obvious at first. Individuals who engage in fraudulent double-brokering might knowingly offer a ridiculously low rate to attract a client. 

Instead of using any of the client’s payment to pay the secondary broker, they simply pass along the information and means to the secondary broker. That company can now start charging the client for additional fees. 

It could include:

• Fuel surcharges
• Hiked up insurance rates
• Accessorial charges
• Storage fees

Anything that can be added, will be added, in other words. This is simply one possible scenario. In either case, it’s the client that ends up overpaying by hundreds or thousands of dollars. Catching and fixing these issues may be possible, but it takes time to do so.

Lack of Accountability

When a shipper’s products end up getting passed around from broker to broker, it creates an accountability nightmare. Even if arrangements are legally above board, each additional player adds to the overall complexity. 

When accountability is forgotten, it leads to other problems:

• Tracking and monitoring difficulties
• Unclear responsibility for damages and losses
• Higher risk of poor service quality
• Challenges in resolving conflicts

Keeping carriers and brokers accountable for their actions, means improving communication and making sure that everyone knows who they are speaking with. 

Fraud Risk

One of the biggest scams, and outright theft, in double brokering occurs when the carrier contracted by the second broker, or the carrier, doesn’t get paid at all. These are malicious brokers who operate under various DBA’s and disappear after receiving payment. 

Another highly fraudulent practice is when brokers deal with a trucking company that is using unregistered trucks or drivers. For example, a carrier might report officially as having two trucks, but is somehow able to handle 100 bookings a week, a glaring sign that doubler brokering is taking place.

Is Double Brokering Illegal?

As a practice, double brokering is considered unethical, but the process of one broker hiring another is not illegal. 

However, many of the aspects of double brokering can potentially violate a number of laws and regulations. 

• Violation of contract terms: The carrier hauling the load or the shipper can specifically forbid the use of double brokering in the contract. Brokers who do so anyway are now in trouble for breach of contract.  
• Confusion of legal liabilities: In cases where the cargo is damaged or lost, the introduction of more players makes establishing liability difficult. When blame can’t be assigned, it leads to expensive and time-consuming legal disputes. 

Of course, in cases where the broker simply runs off with the cash from the deal, it’s a straight case of theft. 

Protect Yourself Against Double Brokering

Since fraud involving double brokering is on the rise, it may be tempting to find and pay carriers directly rather than going through any brokering. However, this also leaves you open to high spot rates. 

Even if you do find a good rate, many carriers operate within limited regions. Shippers could end up trying to manage multiple contracts with different carriers. They’ll spend more time focusing on the logistics of product distribution rather than on running a company. 

Working with a trusted and reputable broker is still the best way to get the services your company needs and deserves. 

Working With the Right Company

When choosing a freight broker, it’s good to be picky. 

What should you look for?

• Well established companies with a long history of good reviews
• Clear contract language that carefully outlines all responsibilities and liabilities
• Frequent and regular communication with drivers they can confirm

If companies are communicating with their drivers, those communications are more easily passed on to shippers. 

Work With The Experts at R+L Global Logistics 

When you work with R+L Global Logistics, you can be sure that you’re working with real people who can offer you trustworthy solutions. 

We’re working hard to keep double brokering away from our clients through the use of innovative technology that helps rate each carrier we work with. When you get a rate confirmation from R+L Global, be confident it’s the real deal. Don’t be fooled by too good to be true offers. Get quality services from R+L Global Logistics today. Call us at (877) 510-9133.