What Do I Do If I Think a Load Is Being Double Brokered?

What Do I Do If I Think a Load Is Being Double Brokered?

Double brokering is a sensitive issue, but it’s important to address it for the safety and integrity of our industry. Over the past 3-4 years, the spotlight has turned to this problem, largely due to supply chain shortages and increased pressure to move loads quickly. While this has created more margin opportunities, it has also opened the door to scammers, fraud, and illegal practices.

What Is Double Brokering?

First, let’s clarify what double brokering is—and what it isn’t—so you can better understand if it’s happening to you.

• Double Brokering occurs when a load, contracted by a shipper or broker to a carrier, is then reassigned by that carrier to another carrier with a different DOT number.
  • Example: Suppose Cargill contracts a load of soybean meal to a carrier, Bob Smith. If Bob Smith, without brokerage authority, passes the load to another carrier, Gary Jones, this is double brokering and is illegal.
  • However, if Bob has a brokerage authority under "Smith Transportation" (set up through the FMCSA with a surety bond), it is perfectly legal for him to subcontract the load to Gary Jones.

What Is Co-Brokering?

• Co-Brokering is a bit different. It occurs when one brokerage passes a load to another brokerage, which then contracts a carrier to move the load.
  • Example: Smith Transportation gets the load from Cargill, then hires another brokerage, which in turn hires a carrier to haul the load. While legal, co-brokering often reduces the margin for the carrier actually moving the load.

Common Confusions in the Industry

While double brokering does happen, there’s often confusion—especially because of one major misconception. In our industry, people sometimes refer to a commodity or grain merchandiser as a "grain broker" or "commodity broker," even though they aren’t brokers in the traditional sense. When a load is passed from a merchandiser to a brokerage, it might appear as if it’s being double brokered, but that’s not the case.

What Should You Do If You Suspect Double Brokering?

1. Flag the Load on BulkLoads:

   • If you suspect a load is being double brokered, you can flag it directly on BulkLoads and provide a reason. We review these flags daily and take appropriate action.

2. Report to FMCSA:

   • There are fines associated with illegal double brokering, which can be reported to the FMCSA. However, enforcement can be inconsistent.

3. Leave a Review:

   • On BulkLoads, you can also leave a review for a company, fostering transparency and helping to eliminate double brokering or other questionable activities.

Moving Forward

We’re continually working on ways to improve transparency and fairness in the industry. Communication is key to keeping everyone on a level playing field, and tools like our flagging and review system are just the beginning.

Let’s work together to keep our industry safe and fair for everyone involved.

 

God Bless,

Jared