Double Brokering Freight, How to Avoid Getting Caught in the Middle
Double-brokering freight is a fraudulent activity as per FMCSA guidelines, which you can avoid by following the best practices of selecting a reliable broker.
Without question, double brokering has plagued the industry for years. It refers to the unethical practice of a freight broker accepting a shipment from a customer to outsource the job to another broker without the customer's knowledge or consent.
This results in financial loss for the customer, damage to the brokers' reputations, and potential legal implications. Learn more about Starting a Trucking Company. It is imperative for businesses operating in the freight industry to be aware of this fraudulent activity and take preventative measures to protect their interests.
Double brokering is a case wherein a motor carrier accepts a shipment to reserve another carrier for the cargo, often pretending to be a third-party logistics brokerage.
This puts everyone involved at high risk. The shipper loses control over their goods, the carrier does not get paid, and the broker has to deal with the aftermath.
The carrier may not meet the required standards, such as possessing the necessary permits or having an acceptable safety rating, putting the shipper and broker at risk of liability or loss.
Previous legal rulings have held transportation firms liable for the actions of incompetent carriers due to failure to follow vetting and safety procedures. Do you Want to know the BOC-3 Filing? It is essential to prioritize safety and vetting since the originator and broker may need to know who is transporting the goods.
Why is double brokering freight risky?
Double brokering poses a significant risk in the trucking industry. The biggest concern is the possibility of shippers and brokers being charged twice for loads.
This might seem strange, but it is a common issue in the industry. Starting A Trucking Company Successfully. Sometimes, a trucking company might give a load to a friend or another company they know and then pay them once the delivery is complete. This is the harmless version of double brokering.
Unfortunately, only some people in the industry are honest. In reality, some companies use fraudulent shell trucking and brokerage firms to contract out loads, with no intention of ever paying the actual hauling carrier. Know about Starting A Trucking Company Cost. This is why double brokering is a widespread problem in the trucking industry.
How to Avoid Getting Caught in the Middle
The initial phase in identifying a possible double broker entails authenticating the phone number furnished by the broker. Learn more about Biennial Update. The SAFER website is an uncostly government utility that can be employed to validate the broker's phone number's authenticity.
Suppose the provided phone number does not align with the number documented on SAFER. Understanding DOT Registration Requirements. In that case, it is recommended to contact the SAFER number designated for the concerned company to converse regarding the load.
Knowing that an employee's identity may have been stolen at the business you are contacting is also essential. Therefore, it is crucial to verify the phone number provided through multiple sources and refrain from trusting information found solely through search engines.
Suppose a broker is identified on SAFER without a visible phone number. In that case, it may be best to delay contracting until the transaction can be confirmed as legitimate. Read more about Broker Freight Package. Document examination is critical in detecting potential fraud, as even insurance certificates can be forged.
Suppose there are suspicions that something may be wrong. In that case, it is recommended to research the numbers provided and call the companies.
Another crucial step in preventing double brokering is to confirm the carrier's identity and the vehicle that shows up to load the shipment. Encourage customers to maintain driver and vehicle logs and verify that the names and numbers on the trucks match the ones contracted for the load. Do you want to know Broker Mover Package information? Requesting pictures of the truck and trailer can also help verify the information in the carrier packets.
In the unfortunate event that a fraudulent load is accepted, this information will be important in identifying the carrier and assisting law enforcement.
Best practices for selecting a reliable broker
- Investigate the broker
To prevent falling prey to swindlers in the trucking industry, thoroughly scrutinizing brokers before engaging in any transactions with them is of utmost importance. Do you want to know the CA Number? You can commence this process by delving into their past, perusing their credit score, and validating their registration with the FMCSA. Demystifying the Requirements for Trucking Registration. It is vital to confirm that the broker's number in their records corresponds with the number from which your load originated rather than an impostor posing as them. Furthermore, it is wise to directly call the broker in question to ascertain the veracity of the information and ease any doubts you may have.
- Build a Network
Another effective strategy is to develop a trustworthy network of brokers you know and trust. By building relationships with brokers who have been transparent and reliable in their dealings with you, you can avoid having to rely on brokers that may not respect your trust.
- Review rate confirmation
After booking a load, it is essential to carefully review the rate confirmation and bill of lading to ensure they match. Obtain DOT Authority For Your Trucking Business. Be wary of rate confirmations that require you to check in as a different carrier than you are, as this could be a sign of a double-brokered load. Suspicion should also be raised if a load has an unusually high rate and requires you to send the POD to a random email after delivery.
- Confirm with SAFER
To further protect yourself, confirm the phone numbers of brokers using the free government website SAFER. UCR DOT Registration Made Easy If the number the broker gave you differs from the number posted, call the number in SAFER for the company to discuss the load. Be aware that some scammers create fake profiles on search engines, so only trust the information if you can confirm it on multiple sites. Know what is a Carrier Agreement. It is also critical to carefully examine documents, even insurance certificates, as they can be fraudulent. If you suspect something is wrong, research the numbers and call the companies.
- Be Vigilant
It is crucial to stop a transaction if a broker asks you to present yourself as a carrier of a different name. Or if they ask your driver to lie about whom they work for, if the broker quickly agrees to pay you more, or if the rate far exceeds the current market rate. Read more about the Claims Package. By taking these steps and being vigilant, you can effectively combat and prevent double-brokering in the trucking industry.
Double Brokering freight blues: Stay safe and secure
Double brokering is a severe issue in the freight industry that can lead to financial loss and damage your reputation. Learn more about DOT Number Deactivation. However, following the tips outlined in this article, you can protect yourself and your business from falling victim to this scam.
It is crucial to examine the brokers thoroughly, establish a reliable network, evaluate rate confirmations, verify phone numbers, and scrutinize documents to avoid being ensnared in a tricky situation.
It is essential to be resolute in your quest for the truth and to ensure that your establishment's security and safety are always paramount. Do you want to know Dot Authority? With these resources, you can stay ahead of the curve and ensure triumph in the freight industry.
