It has been a while since I have written about double brokering. At first, writing about double brokering was to bring awareness to a real challenge affecting shippers, brokers, and carriers. I wanted to provide best practices and work within a great network to share information that would help protect shippers and broker’s freight.
Along the way, I was provided education on how the D.O.T and FMCSA work by Joseph M. Metin ( D.O.T formerly ). His insights were eye-opening. After meeting @JoeHoward and The Bannon Report ✔ , I understood how they used COI to uncover Bad Actors. The negative effect the BAD ACTORS were and are having on our industry was growing. Individuals such as Cassandra Gaines Carrier Assure Inc. and Michael Caney Highway started companies addressing double broking challenges to support our industry. Then I met Dale Prax ✅ at FreightValidate ✅, and within 4 weeks I understood Dale to be another expert on the challenges we were/are having with the FMCSA.
I have and will continue to support all these individuals as they are trying to improve our industry, and I have been learning from all of them every week and would like to continue the conversation.
The challenge with the majority of Double Brokering is that it is created at the source, the FMCSA. In my opinion, they need to stop issuing bad MC#s, and if they spent 5 minutes looking up the individuals applying for an MC#, they would know they have issued these individuals 12 to 24 MC#s in 8 months. I have agreed with Michael, Casandra, and Dale we should not reveal or discuss all aspects of a plan to disrupt double brokering, since it may allow these bad actors to plan ahead. Ultimately, we have to remember that these criminals have TIME and MONEY, and their entire time is spent coming up with new ways to Double Broker or steal freight.
Many people want to bash the load boards and blame them, and in my first articles I also asked for load boards to get better (though I never named any of them), because as technology-based companies with money and a full understanding of our industry, I believed they could assist in this fight. Still, we need to understand they are companies looking to grow and make a profit just like all of us in transportation. If the FMCSA issues an MC#, and it is valid when vetted, they sell them an account to build their revenues. Until people start reporting bad MC#s and they can investigate, Bad MC#s cannot be removed. It is in the interim that the damage is done.
I have had 2 of the largest Load Boards reach out, connect, and share insights over the past several months. Since the last article, Truckstop has been using Carrier Assure and adopting tools, and DAT Freight & Analytics has been working and looking into vetting MC#s to improve the products they provide to the transportation industry. The TIA and HIGHWAY have been working together since 2023. In different ways, and to varying degrees of effectiveness, they are all working to improve and assist our industry.
There is one form of Double Brokering that is more challenging to prevent or defend against and has been happening more frequently in the current market. This is the scenario shared with me last week; The Shipper or Broker fully vets the carrier - whom we will call carrier A. Their MC# is valid, and they have a great COI that covers the shipper’s commodity at the amount required.
As a result, the Shipper/Broker tenders their shipment to the now vetted 'carrier A'. The broker has a new process and calls to make sure the shipper loads carrier A. They have verified that carrier A is picking up the shipment, and the broker/shipper agrees all is good, is appears the right carrier is loaded.
Carrier A now brings the shipment with a local driver back to the terminal, where carrier A hires carrier B, and transloads the shipment to carrier B. Carrier A provides carrier B with a Load tender and BOL issued by carrier A, and carrier B provides and completes the transportation requirement. Carrier A tells carrier B broker/shipper is delaying payment and holds them off as long as possible. Carrier B starts to realize 60 days later that there is a problem. Carrier A is no longer returning calls or emails. Carrier B calls the consignee to find out whose shipment they hauled, as they have the POD, and are looking to collect using the Transportation Act. In this scenario, the Shipper/Broker pays twice for the shipment as carrier A is in the wind.
There is NO software that can detect or catch the carriers that are double brokering in this manner. The other concern is liability is being transferred between 2 non-contracted parties. Carrier A is not licensed to broker freight MC# is for asset moves only, and has NO contingency cargo insurance in the event Carrier B does not have proper coverage. This type of double brokering is being done every day. I had one broker call and describe a situation with 2 carriers who were fighting over his freight, which was not being delivered having a negative effect on the shippers' supply chain.
There are good carriers that come forward to shippers and brokers when they can identify that a load being offered to them is actually being double-brokered. We applaud all of you and need more carriers like that in our industry. Shippers and brokers all want to pay the actual carrier that did the delivery and incurred all the actual cost to move the freight.
The people mentioned above working to protect and improve our industry against BAD ACTORS are doing a great job IMHO. The FMCSA needs to improve its process to help protect our industry.
The current fines are clearly not being levied or enough to deter BAD Actors. Perhaps more stringent fines up to imprisonment can be considered to be a real deterrent.
