Steer Clear: The Risks of Double Brokering

Double brokering — the practice of a carrier re-brokering freight to another carrier — can be illegal, but that doesn’t stop companies from doing it. In fact, double brokering might even be on the rise. According to Transport Topics, instances of double brokering have skyrocketed since December.

A lack of regulatory oversight and continued supply chain disruption from the pandemic have made conditions ripe for fraudulent brokers to offer deceptively low rates on load boards, only to double broker the load and end up not paying the actual carrier. Keep reading to learn more about the risks double brokering can bring, as well as how to steer clear of the same pitfalls.

Aside from legal ramifications, there are more dangers lurking behind double brokering. Here are some of the top risks that can wreck any small- to medium-size trucking fleet.

• Lack of transparency. If you’ve brokered a load to a carrier that is double brokering, you may not know where your cargo is or what its arrival time will be. With modern technology, many customers have “Amazon-ified” expectations of communication about their freight: they want to know exactly where it is and when it will arrive. That’s not always possible when a second broker takes over the goods.
• Higher chance of theft. Double brokering makes theft easier because the cargo is harder to track, and if you don’t know who has your freight, your customer might not get their delivery on time — or at all. In fact, with the lack of regulatory oversight and the prevalence of scammers, the trucking industry loses more than $100 million per year due to theft and damages from double brokering.
• Brand damage. If you lose freight because of double brokering, unhappy customers can leave negative reviews that will damage your PR for years. And with 1.2 million trucking companies in the United States, it’s easy for customers to dump you in favor of someone who can promise transparent freight communication and on-time deliveries.
• Inaccurate load board listings. In an effort to scam more people, companies that are double brokering will sometimes create a post for the same load on multiple lead boards. Small- to medium-sized trucking companies may unwittingly take some of the jobs. Later, they’re left outraged when they aren’t paid.If you were one of the companies who did the double brokering, the chances are increasingly high that whoever you hand your shipment off to never delivers it to the customer. This may get you kicked off of load boards and prevent you from doing business with other companies ever again.
• Payment issues. If you carry a shipment and find out your client was using you as a double broker, you’re in trouble. Double brokering frequently causes issues with payment between brokers and carriers. The original customer who owns the freight may be left in a losing situation where they were lured in by a suspiciously low rate, only to find the carrier wasn’t paid and the double brokers ended up with the whole paycheck.

One of the first things any carrier should do to avoid double brokering is verify load board listings. Some red flags may be that the offer is too good to be true — either offering an unusually low price or an unrealistically quick delivery time. Check other load boards to see if the same shipment is posted in other places at different rates. You can also check whether the shipment details are the same, such as the weight and delivery address.

Always work with trusted partners, even if that means doing a little research. Read reviews carefully to ensure you’re working with upstanding professionals. Using a vetted load board can help, and networking and building relationships with brokers can help you find other reliable resources.

Unlike other load boards, the Sylectus load board is an alliance of vetted carriers and offers more than 26,000 vehicles for your freight. If you’re in need of capacity, use our network to find the best option for expedited, partial load, dry van, refrigerated, and flatbed freight.

Additionally, our transportation management software (TMS) solution has features to help keep your load moving efficiently and safely. Leverage our Sylectus Mobile app to track cargo in real time, keeping you and your customers updated on progress and ETA. A TMS can also maximize your fleet efficiency by identifying backhaul opportunities.

To learn more about how Sylectus can help you steer clear of double brokering, contact us today.