What constitutes "double brokerage"?

loaders

Site Supporter
30
If only the "real world" was as innocent and simple as you describe in your example Michael. Even I, the anti-double brokering crusader, could live with it if I had to. Unfortunately, every case of double brokering posted on this site is the exact opposite.
 
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MikeJr

Moderator
Staff member
30
Would it be simplest to say that all parties to a transaction need to know that all others exist, all need to provide their piece of the puzzle with regards to 'value add' and all monies need to trickle from the 'beneficiary of the goods' to the guy in the truck in order for it to be considered above board?

The dirty 'double broker' usually falls under people passing freight to hidden/unknown parties, or worse, intending for the dollars to stop at them and not pass down the line to those deserving.

Keep well,
Mike
 

Michael Ludwig

Well-Known Member
20
@loaders Agreed, wholeheartedly agreed. That's just the way I do it. Is it the norm, or industry standard? Not by a long shot. That's also why I don't broker too many loads ;)

In the real world carriers are their own worst enemies. Maybe carriers should follow the old adage "If it sounds too good to be true, then it probably is", and ask themselves one simple question when they get offered loads ... "How did Fly-by-Night Logistics, a one-man, basement broker, manage to get the KFC contract from Pepsico?"

Granted, that makes it incredibly difficult for start-up operations to get into business, but truthfully, how many more brokers does this industry really need? The same is true of carriers. How many more carriers are really needed?

Just follow the industry news. Established carriers are buying up small carriers left right, and center. Established brokers are buying small brokers just as much.

In either case, new carriers or new brokers, nothing new, or innovative is being added to the industry as a whole. However, on the carrier side that just might change as power unit technology develops over the next few years. Perhaps someone with very deep pockets mau get into an all electric truck fleet and take over the short-haul market in certain areas ... who knows.

However, I digress ... for someone to jump into the brokerage game, even if they start out as a basement dweller, they have to have a good reputation in the industry, and they have to have their own customer base. Otherwise they are just pilfering loads from LoadLink and reselling them.

Established, large brokerage firms probably are the ones that need to be blamed for the proliferation of the double brokerage industry. Were they just a tad more careful of who they are dealing with and giving their loads to, there wouldn't likely be a big double brokerage issue, if there even was one at all. Maybe, just maybe, they should actually check out the "carriers" (read double brokers here) that they hire instead of just relying on the paperwork they get sent. Frankly, if they're not doing their own due diligence, then they really have no place to complain about double brokers ... somebody has to be giving them freight, right? The double brokers certainly are not getting it on their own.

Lastly, places like Inside Transport make an excellent resource for rooting out the nefarious double brokers. Everyone, and I mean EVERYONE, should take note of those accused, and vetted, to be double brokers. They should end up on EVERYONE's do not use list.

WOW, that was long ... somebody needs to find me something to do ... LOL
 

theman

Well-Known Member
20
Well, I think you all know that I exited the industry 2 years ago but it still interests me. I can tell you 100% for fact that at every place I worked at since 2008 we policed it, and if we ever determined a shipment was double brokered, we'd pay the carrier direct and cut out the bullshit. It happened too many times where there was fraud involved and we didn't want to be involved in it. When dispatchers were not being dilligent and this would come up, heads would roll.

The company that I worked at from 1999-2008 definitely participated in co-brokerage agreements with US brokers at the time. It was left to the discretion of the Account Executives. I personally stopped soliciting that type of business in 2002.
 

loaders

Site Supporter
30
I think everyone knows what double brokering is Wesward. The uncertainty you refer to is caused because some people occasionally find it acceptable in certain situations or with specific conditions being adhered to. Others, like myself, find it distasteful and unethical in pretty much every possible situation.
 

wesward

Member
10
This has been great topic and seems to have lots of different opinions on what is or is not double brokerage and if in Canada there is such a thing.
Please correct me if I an wrong but there is no lic. for this in Canada or required?
 

loaders

Site Supporter
30
There is no Federal licensing requirement in Canada to operate a freight brokerage. In Ontario, the HTA requires freight brokers to establish and operate a Trust Fund. Regardless of where you are based or where your bricks and mortar facilities are located, if you arrange for the transportation of goods either into or out of the US, you are required to be licensed with FMCSA.
 

Freight Broker

Well-Known Member
30
Make sure your shipper has the name and USDOT number (or some other identifier) If that info doesn't match to the truck coming in then do not load. That stops double brokering in its tracks.
 

wesward

Member
10
I think if you do your checking out of your carrier/ broker and they are paying the bills and on time then is a company can assist you in moving of freight and can get an experienced carrier on ti and everyone gets paid then why an issue. It is the companies not following this that puts bad name out there
Why can we not all work together.. Pay the carriers so all make money
 

Henry

Active Member
10
On that note, what is Interlining? When i set up the GST account a few years ago, They advised me that i interline when billing other transport companies and bill GST when i invoice my direct client. They did tell me that brokers needed to charge GST. But then another agent told me not to charge GST. CONFUSED.
 

loaders

Site Supporter
30
It would help if you were a bit more specific Henry. Perhaps a couple of examples of where you are confused might help us provide you with the answers you seek. Obviously any shipment coming from or destined to the US is GST exempt, whether or not it is interlined with another carrier or the freight was obtained from or sold to a broker.
 

Henry

Active Member
10
I guess my question is , at what point would a broker bill GST to a carrier? I am a small carrier but at times i act as a broker when i give out freight from my direct customers.
 

loaders

Site Supporter
30
Still don't understand what your question is. A broker doesn't bill carriers generally speaking, carriers bill brokers who in turn, bill their customers. If the shipment was entirely in Canada, a carrier would bill the broker without GST and the broker would then bill his customer at the applicable GST rate for the province where the load delivered. Interlining generally refers to a situation where more than one carrier is involved in the completion of a shipment. As an example, carrier A has a shipment from one of his Montreal based customers destined for Windsor On. Carrier A doesn't run to Windsor but can take the shipment to Toronto where he will interline with carrier B who will deliver the shipment to Windsor on the same Bill of Lading (sometimes called a through Bill of Lading). Carrier A will invoice his customer including the Ontario GST rate. Carrier B will invoice carrier A at their agreed rate without GST. If this same load originated from a freight broker, carrier A would invoice the broker at the agreed rate without GST, and the broker would invoice his customer including the Ontario rate GST.
 
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