What constitutes "double brokerage"?

blairboy

New Member
2
I have seen and heard many people throughout the years that feel negatively about double brokerage even though from what I have seen, almost every trucking company does it. I have used outside carriers and drivers before when my trucks have been double booked by my dispatchers.
So is it only frowned upon when little trucking companies do it, opposed to bigger trucking companies or is it solely a question of not paying carriers once they picked up and delivered a "double brokered" load?
Opinion please.
 

Mechanic

New Member
2
To me, there is a difference between subletting services, and double brokering and not paying. I believe the concern here is when a company commits to a load (knowing right well they don't have a truck) take payment from the customer immediately, and hold up the broker that actually delivers the load. Whether it be delayed paying times, or not paying at all. This is frowned upon for obvious reasons, however I see nothing wrong with making alternate arrangements with another carrier to get a load delivered to your customer on time. In my opinion if you are subletting services to another reputable carrier to satisfy your customers needs that is nothing shy of doing good business.
 

loaders

Site Supporter
30
If I as a broker, determine that you are the best qualified carrier to service the requirement of my customer on a particular load, and then you sell that load to another carrier without my knowledge or consent.......that is double brokering and it is unethical. I am the entity who determines which carrier hauls my customers goods, no one else. As mentioned before, double brokering causes untold headaches with proper communication, trustworthy service and last but not least, payment to the party who hauled the load. Subletting, co-brokering, without authorization from the original broker is not right and should be frowned upon. If you cannot honour your commitment to me, let me know and I can make the decision as to what to do.
 

Henry

Active Member
10
I use brokers once in a while to move my freight. I know they use other carriers sometimes. I don't really care as long as nothing comes back on me. We are a small carrier and have overflow. We don't make too much on these shipments but everything helps these days.
 

chica123

Site Supporter
20
Henry, I don't think your situation is the same. You have your own freight to cover and use the service of a broker to help you find a carrier. You also know that the broker is not going to move the freight themselves. You are a small company with the odd shipment you cannot cover. What we are speaking about are brokers that survive solely on finding well-paying (or not) loads and then redistribute them to carriers at lower prices. Most often the carriers are not given complete information regarding pick up and delivery expectations, are left holding the purse on waiting time, are not given proper customs docs, are not properly compensated, the list goes on and on. We have all fallen victim to one of these loads at one time or another and it is not pretty. You must have come across one of these atrocities at some point. We most likely were not told ahead of time that the load was double brokered. Sometimes we are left chasing payment from shady dealings. That is the situation we are talking about, not yours. I have one or two times in the past had a load (our own customer being the important factor here) I could not cover and a trusted broker helped me cover it. That is completely different. Have a super day!
 

chica123

Site Supporter
20
Btw, I think out introduction to double brokering was Rockman, remember them back in the day? I think that might have been the load that caused me to find this website...lol
 

MikeJr

Moderator
Staff member
30
Straight definition: load passing through multiple parties prior to being issued to a proper carrier for transport.

There's usually only 2 scenarios:

If all parties know and agree to the transaction, understand the relationship and everyone gets paid their fair share, no problem. For example, a carrier using a broker for excess freight where the shipper knows that this relationship exists and the end carrier receives full compensation.

If however any of the parties decide to act in a fraudulent manner and the flow of payment stops (non payment), this is where the negative view of the phrase 'double broker' comes from.

I think.

Happy Friday!
Mike
 

Freight Broker

Well-Known Member
30
Generally only happens to good paying freight where the money pie is big enough for it to happen. Lots of bad stuff can happen to you if you happen to be the owner of some good paying freight.. others will attempt to double broker it...and others will see it as an opportunity to go to the shipper direct.. i.e. give them a bit of a discount and cut you out. The irony is if you're a cheap assed broker who offers shit rates on difficult loads you're going to have problems.. but double brokering and back solicitation are two problems you likely won't need to deal with.
 

MikeJr

Moderator
Staff member
30
I've got to disagree (only from my personal experience), perhaps I've been relatively lucky?

Speaking as a freight broker myself, the shipments that are for premium customers with larger margins (good paying freight) should only be tendered to top tier carriers who offer a premium service and demand a premium price (and limit the risk of rebrokering happening).

Simple example: I have a TL of show freight to CA, just give it to Garry Mercer who will pick up on time, deliver on time and keep us posted well in advance if they need help with the clearance for whatever the current going rate for premium service to CA is and you know it'll be on his truck until it delivers.

I find the limited experience I've had with a carriers rebrokering (double brokering) my load to another carrier is not the premium service loads, but your every day loads they intend to collect from me and disappear without paying the transporting carrier.

Keep well,
Mike
 

loaders

Site Supporter
30
Everyone seems to get caught up in the payment problems that can result from a double broker situation. I find what is more troublesome and causes more headaches is the lack of communication. My staff calls the carrier we gave the load to for a status check. Obviously they can't give us a straight, up to date answer because they don't have my freight, someone else who I don't know does. So, we have to wait, and we have to hope that the carrier with my freight is giving the right information to the carrier we gave the load to originally. Plus, we have to hope that there are no bad feelings between these two parties that could affect the delivery. No doubt, even if the transport and delivery goes smoothly, we are still not "out of the woods" because no one has been paid yet. Not me the broker, not the carrier we gave the load to in good faith, and not the carrier who did the transport. I hate double brokering so much that even typing this makes my blood boil! For goodness sake, if you can't haul the load yourself, give it back to me and I will find someone else. That is what we do, we're freight brokers, we find available trucks. Let us do what we do and you, the carriers, do what you do.....haul freight, not rebroker it!
 

Henry

Active Member
10
I have never had a carrier admit to me that the freight was being re brokered. But for the most part so far, i have had only a few problems, knock on wood.
 

markhamboy

Active Member
10
If I as a broker, determine that you are the best qualified carrier to service the requirement of my customer on a particular load, and then you sell that load to another carrier without my knowledge or consent.......that is double brokering and it is unethical. I am the entity who determines which carrier hauls my customers goods, no one else. As mentioned before, double brokering causes untold headaches with proper communication, trustworthy service and last but not least, payment to the party who hauled the load. Subletting, co-brokering, without authorization from the original broker is not right and should be frowned upon. If you cannot honour your commitment to me, let me know and I can make the decision as to what to do.

Well said.
 

AccountsReceivable@DRC

Moderator
Staff member
20
The term "double brokering" becomes a negative one when the money doesn't quite add up. Broker takes the load passing it along for a lower amount to another carrier and onward it goes. At times the freight is tripled brokered. That's the bad "brokering" scenario....the one this board helps to prevent. There is a quite a difference in scenarios which in my opinion, "brokering" becomes legitimized when the money is passed to the original delivering carrier in full.
 

GaryS

New Member
2
The term "double brokering" becomes a negative one when the money doesn't quite add up. Broker takes the load passing it along for a lower amount to another carrier and onward it goes. At times the freight is tripled brokered. That's the bad "brokering" scenario....the one this board helps to prevent. There is a quite a difference in scenarios which in my opinion, "brokering" becomes legitimized when the money is passed to the original delivering carrier in full.
Well put.
 

theman

Well-Known Member
20
Double brokering is when a load goes from one broker to another broker to assign to a truck. It is very different from interlining or subcontracting.

If a carrier (a REAL carrier) has freight that they got from a 3PL of any sort and they have to sublet it, the contract between them and the party they got it from inisures the freight as if it was on their own truck. And customers are usually aware of this because the contractual arrangement between shipper and carrier requires the carrier to make them whole when their own equipment is not available.

When it is broker to broker etc the only insurance is contingent insurance should the actual carrier's insurance fail or if the carrier is in default with their own insurance. So effectively, cargo being carried in such a manner is not insured.

Also, supply chain these days is all about visibility, so if sneaky stuff is happening behind the scenes, the information that the shipper and customer have is all garbage. Any shipper out there that has any real customer service mission will not allow themselves to be in such a position.
 

loaders

Site Supporter
30
I don't doubt what you said theman, however the scenario you described may not be what usually happens in the real world. Yes, when there is a contract between a 3PL/shipper, and a carrier, usually the contract allows the carrier to move the freight on either his truck or another carrier who meets the same criteria as the original carrier i.e. insurance, driver selection, equipment maintenance, etc. etc. in other words, moving on another carriers equipment as if it was on the original carrier. What happens more often is a situation where I have given a shipment to ABC trucking and for whatever reason, they decide to give my shipment to XYZ trucking. I do not have a contract with ABC, just his insurance, authorities, WSIB, etc. I have nothing on file for XYZ and doubt if there is any contract between ABC and XYZ other than XYZ had a truck available. As a result, there would be no continuation of ABC's cargo insurance once the shipment is loaded onto XYZ's equipment. Once ABC gave the shipment to XYZ, in the eyes of their insurer, they relinquished their insurable interest in the shipment. Here is where the ugly part of double brokering occurs. My shipment, unbeknownst to me, is now in the hands of an unknown party, who I can only assume has proper insurance, WSIB, etc, all of the things I ask for as a professional load broker. So yes, in the civilized world of contracts and experienced transportation people on both sides of the transaction, no problem. In the Wild West that is the rest of the transportation industry, double brokering is something to be avoided.
 

wesward

Member
10
I think if everyone did their job.
i.e. if a broker has a load and find a carrier rather than sit around being lazy and wait for someone to do the job for them and a carrier that someone else found for broker
and also a carrier not just sitting in wait for someone to contact them for a load and actually did their job and did a search to find a load then...Well maybe there wouldn't be double brokering
so I think if someone else is doing everyone eleses job then why shouldn't they get paid for it..(As long as they pay the carrier)
So hense i call it more helping each other out..
Again as long as all parties get paid
 
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