As capacity changes and some carriers become desperate, they may try to double broker shipments to a cheaper carrier and keep the profit. Or they decide to double broker the shipment at any price to another carrier, pocket all the shipper/broker’s money and shut down the business. Often the broker or shipper will not find out about double brokering until there's an issue with the freight or the payment. Let’s talk about how to prevent it from happening and how to handle it when it does.
What is double brokering?
There are many types of double brokering, and it can be done to all kinds of freight. The most common type is when a broker or shipper hires a full truckload carrier with a specific MC number, but an entirely different carrier with a different MC number transports the shipment without the customer’s knowledge or approval.
Why do carriers double broker?
There are a couple of reasons why carriers double broker. But the most common one- in this market- is the carrier is tight on cash and therefore, either hires another carrier at any price and just keep the broker or shipper’s money or the carrier hires another carrier at a cheaper price (a carrier that probably wouldn’t pass many customers’ vetting process) and keeps the profit. The latter option is a common scam that goes on in southern California. That scam is driven by “carriers” with no actual equipment that establish a company for a few months, pretends it is a carrier, double brokers all the shipments and then shuts the company down when they get caught and starts a new company doing the same thing again.
How to avoid double brokering?
By using Carrier Assure, it is easy to avoid those carriers that may engage in double brokering. By avoiding hiring those carriers with an F score (and often the carriers with D scores as well - look for the RED Business Stability box), you can significantly reduce the risk of falling victim to double brokering scams. Carrier Assure uses data analytics to provide informative guidance on how a carrier will perform by analyzing past data. If a carrier has an F score, it may be best to avoid the carrier, or, after completing your normal vetting process, tender an easy, low-value, short hauls shipment to get some experience with the carrier before giving it a more complicated shipment.
Within this industry, it's critical to be hypervigilant and read into what's happening with your brokers and carriers. Being attentive to red flags, building solid relationships, strictly vetting the carrier, knowing your capacity, and staying in constant communication with drivers will allow you to see when double brokering is happening and stop it before any issues occurs.
Pro tip: Tell the carrier that upon pick-up, the customer will confirm the MC and DOT information and call the broker or shipper.
Why avoid it?
Because double brokering happens all the time, some may ask, but what’s the big deal? These are just some of the main reasons double brokering is such an issue at the end of the day:
- No insurance coverage if something happens to the cargo
- Shipment could get stolen
- Broker’s customers become angry when involved in double brokering problems
- The chances of problems occurring increase significantly
- Major delays and service problems usually occur
Double brokering red flags
- When the carrier has a score of an F on Carrier Assure.
- When the carrier has 0 inspections and less than 3 months of authority
- When you’re speaking with a dispatch company, not the carrier
- When the carrier is in Glendale California or has an 818-area code
- Not providing truck driver information like names and phone numbers.
- You call the insurance broker and find out the carrier only has 1 truck, and it doesn’t match the VIN you have on file
- Quick pay and fuel advance. It’s not always bad, but companies must watch out if their carrier is doing it all the time.
- When there is a problem, and the carrier says it was caused by their “owner-operator” which is code work for double-brokering.
Avoiding double brokering is critical to providing quality services for customers. But it’s not just on the carrier; it becomes a broker issue when they’re not thorough in vetting and keeping track of their customers’ shipments. In the current market, service to shipped customers is a top priority, which is why every broker is making significant efforts to avoid double brokering.
Are you tired of experiencing double brokering despite all your efforts to avoid the red flags and vet the carriers? We have an easy solution. Try Carrier Assure for free for 30 days! Register for an account on our website and after you login, click on the upgrade button and follow the steps to upgrade your account. When you see the price, use the promo code 30 DAYSFREE. If you have any questions, we are here to help at any time, you can email email@example.com.