“Double brokering” is a type of freight fraud that occurs when a freight broker takes a load from a shipper and then brokers it to another carrier without the shipper’s knowledge or consent. This leaves the original carrier out of pocket, as they have no way to get paid for the load they have moved.
Double brokering is a serious problem in the transportation industry, and it can cost shippers and carriers millions of dollars each year. In some cases, it can even lead to the collapse of businesses. In Q1 2023, Truckstop.com, saw a 400% increase in double brokering complaints.
There are a number of red flags that can indicate to a shipper that a broker is engaging in double brokering.
- The broker is not willing to provide the name of the carrier who will be moving the load.
- The broker is offering a price that is significantly lower than the market rate.
- The broker is asking for a fuel advance.
If you suspect that a broker is engaging in double brokering, there are a number of steps both shippers and carriers can take to protect yourself.
|Shippers/Carriers||Do your research. Before you work with a broker, check their references and make sure they have a good reputation. For carriers, factoring companies like Riviera Finance can validate the broker for you by approving credit before you pick up the load.|
|Shippers/Carriers||Get everything in writing. Make sure you have a written contract with the broker that clearly specifies the terms of the deal.|
|Carriers||Make sure that your company is named as the “Carrier” on the Bill of Lading (not the Broker’s name).|
|Shippers/Carriers||Reverse search the telephone number to make sure it comes back to the Broker, search the Broker online to see if their phone number is the same as the one you were given.|
|Shippers/Carriers||Be aware of the risks. Understand the risks involved in double brokering and take steps to mitigate them|
|Carriers||Partner with a reputable Freight Factoring Company.*|
If you believe that you have been the victim of double booking, there are a number of things you can do. You can file a complaint with the Federal Motor Carrier Safety Administration (FMCSA). You can also contact your state’s attorney general’s office.
Double brokering is a serious problem, but it is one that can be avoided. By being aware of the risks and taking steps to protect yourself and your trucking business, you can help to ensure that you are not a victim of this type of fraud.
Here are some additional tips to help you avoid double booking and freight fraud:
- Only work with reputable brokers. Do your research and get recommendations from other shippers and carriers.
- Get everything in writing. This includes the terms of the deal, the name of the carrier who will be moving the load, and the payment terms.
- Be aware of the risks. Understand that double booking is a possibility and take steps to mitigate the risks, such as requiring a fuel advance or getting proof of insurance from the carrier.
- If you suspect fraud, report it immediately. Contact the FMCSA, your state’s attorney general’s office, or a freight fraud prevention organization.
* As noted above, you can protect yourself by partnering with an experienced, well-established Freight Factoring company like Riviera Finance. Riviera has over 54 years of non-recourse invoice factoring experience. Because we are non-recourse we are experts at vetting both brokers and shippers and due to the sheer volume of transactions that we process per year we have a wealth of information that helps us identify bad actors and protect our customers from double brokering and freight fraud.