Risks Involved with Double Brokering
Doing your due diligence when booking a load is very important to avoid loads that can harm your healthy business. One of the riskiest things to do is to haul a double brokered load. Double brokering is the unauthorized re-brokering of a load to another trucking company. There are methods of double brokering with various levels of risk but it’s best for a carrier to completely avoid any load they suspect was double brokered. In order to avoid taking one of these loads, you’ll have to understand some of the specifics. Let’s take a look…
Co-brokering is different from double brokering
It is important to note that the following double brokering methods are different than the common practice of co-brokering. Co-Brokering happens when a freight broker is permitted to assign the freight to another broker. In a co-brokering scenario, both parties involved have broker authority and an agreement that all parties have signed off on. Co-brokered loads are safe to run and common in the industry.
What risks are involved with double brokering?
Double brokering happens when a carrier has tendered a load and then reassigns that load to another carrier. This may happen for less money than what they were originally booked for, or it can be for a much higher rate with the objective of making it an attractive load to haul. In both scenarios, this is an unauthorized re-brokering of freight whether the company does or does not have the authority to be a brokerage. A company that has the authority to broker the load may also re-issue the freight through their brokerage, making the load appear more authentic. However, this is still an unauthorized re-brokering of the freight. While double brokering can still result in a carrier receiving payment, there are also companies who re-broker assigned loads without any intention of paying the delivering carrier. These fraudulent businesses do not last long before they shut down. As a rule of thumb, “If the rate appears too good to be true, it probably is.” Being aware of these frauds and how they move tender will help you identify them. Below are some of the risks that are involved:
- Extreme delayed payments OR not receiving payment for a load at all
- Denied insurance claim if something should happen to the load
- Harming your business’ financial future from a double brokered load
- Having your business become blacklisted (if assumed involvement)
Avoiding Double Brokered Loads
Luckily there are several ways to keep clear of running a double brokered load. The first thing you can do before booking the load is utilizing your resources here at OTR Capital. We are here to help you and want to make sure you’re avoiding loads that do not have your best interests in mind.
- Crosscheck the brokers info and credit score to make sure they are registered with the FMCSA. You have the ability to check the number on file with the FMCSA to confirm that the load came from that broker, and not someone posing as that broker. You can always call the broker directly to have them confirm the load details is you have any reservations.
- Review the rate con thoroughly after a load has been booked to check for red flags. The rate con telling you to check in as different carriers a cause for concern. Continue to review the paperwork as you move forward and ensure the bills match the rate con at pick up.
- Usually high rates are indicative of a predatory load, as are demands that PODs be sent to arbitrary emails immediately upon delivery.
- Build relationships with brokers. Continue to run with brokers that you’ve had success with for different projects. Building trust and establish relationships will ensure your business is in good hands.
These measures will significantly decrease your chances of experiencing the detrimental effects of
It’s important to be aware of the ways in which your trucking company could be adversely affected. Double brokering, and fraud in general, can hinder your ability to stay successful. As always OTR wants your company to succeed so if you are ever in doubt about a load or a broker, you can always call us. We are happy to help give you our professional opinion.