Double brokering & Numbered Companies

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Tramp1947

Member
Jun 3, 2011
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I have been a one truck & trailer common carrier for many years. I have my own authority, insurance and plates. ALL IN MY NAME. The only connection I have to any other carrier is that I pull for them only. BOTH WAYS. However, I have always been confused as to what the MAJOR carriers consider double brokering.

Is it OK for one company with say 15 trucks to FARM out a load to another company with say 10 trucks? IS THAT DOUBLE BROKERING? If not then when does it turn into it?

As a O/O who likes to pull for ONE carrier only and let THEM find my freight and pay me. Does this constitute double brokering??

I also never thought I would work for an East Indian owned company. However over the past few months I have been pulling for one. I find it amazing that a bigot like me could have been so wrong about people. Yes there are ALOT of LOUSY Indian carriers as well as Polish, Russian, and Canadian carriers. Most of them running under the numbered company status. But there are more who are just trying to make and keep a customer base doing the best job they can.

A lot of them are using single truck carriers like myself to try to improve their image in the industry.
 
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Tramp,

What you and they are doing is fine as long as the company that is getting the loads for you is upfront to the broker or carrier they are getting the freight from. Are they telling them they are booking for you - sending your info for Insurance/WSIB etc? I too have loaded my one truck friends over the years but if I was loading them with brokered freight the broker was told. Alot of brokers in the situation said go ahead some wanted the guys package one or two even said no that is double brokering have him call them direct.
 
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Double brokering

This is a vague term that usually refers to a load that has been given by one freight broker to another and so on.

I have seen a load that we did not get paid for that went through two US freight brokers and finally one Canadian broker. That load originated with a general contractor working to refit a hotel. We have it in small claims court. Of course each party took a serious cut!!!

I imagine that this act probably originated with the advent of the internet and load boards, where there is no direct contact between parties.

The large discrepancy, between the $US and $CDN., back a few years ago allowed a broker to earn up to 40% gross profit on the currency exchange alone.

The problem with double brokered loads came about when the margin between the two currencies evaporated. The brokers, that were used to making big money, saw their receipts go down but their expenses stay the same. There was no more money to be made. Eventually, these desperate brokers went one step further and omitted paying the carriers at all.

Hence the bad connotations of double brokering.

As for your case the situation is not one of double brokering.
What you have is a exclusive contract (be it verbal) between you and another carrier.

The fact that you are running your own authorities separates you from an owner /operator.

The brokering term really does not apply to the carriers carrying out the work. There are few carriers that do not sub contract their excess work daily, even by hiring outside carriers to help with local pick ups and such.
 
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Hold on here...

Some "one person" Owner Operators arrange with an individual/Company to act as their central Dispatch. The question always has to be asked - is this your truck picking up the shipment?

If it is identified that the Party you are speaking with, advises you that they just dispatch for this Carrier...you better ask for the name of the Carrier and secure the Carriers pertinent information.

You can wrap it up and look at in many ways......BUT...at the end of the day you had better done your diligence to protect your interests.

Buyer beware.....
 
As Tramp1947 stated, he has his own truck, authorities, insurance, etc., therefore he is a carrier. If he hauls freight from another carrier then that other carrier has "brokered" the freight to him. If that other carrier received the freight from a freight broker, under the assumption that they were going to haul it themselves but for whatever reason didn't, then it would be "double brokered" freight if Tramp1947 hauls it.
It would seem that the majority of the posts on this site regarding non-payment of freight bills, originates with carriers who decide to "farm-out" or double broker their extra freight to other carriers and then take far too long to pay the invoice. Remember, if you sell the freight and make a profit on that sale, you have brokered the freight regardless if you are a "carrier" or a "freight broker". Freight brokers need to know who is hauling their freight at all times. The majority of carriers we deal with always advise us if they have run into problems and cannot complete the work as promised before they "farm it out" to someone else.
 
Please keep them coming

Thanks for the input guys. I also think honesty is the best policy.
I also think that ALL parties should do diligence.
ME to make sure the carrier I deal with is reputable.
The carrier I deal with should also check Me out to make sure I am reputable.
If both are happy and make this VERBAL CONTRACT what is the difference between Me and a O/O who flys the company colours?
 
In order to keep quality control for our sake and the sake of our customers, we have to run and maintain stats on safety, insurance for every carrier that hauls our freight. So if you're a one man show being dispatched by someone else, that someone must disclose they are loading you, under your authorities and insurance. It is the broker's (or shipper's, for that matter) decision on whether you are deemed fit to load or not.

As far as giving a load to a 15 truck operation who brokers it to a 10 truck organization, simply this is no good at all. Again, it's a liability issue in terms of making sure who is hauling is fit to haul ... and also to make sure the actual carrier gets paid.

In this electronic age, there is really no place for double-brokering. But tramp, what you're doing isn't considered as such.
 
OK Theman. If I am reading the consensus properly - what I ( and a few other one truck/trailers opps) are doing is NOT considered double brokering? However it looks like a few still have a problem with us.

I really would like to be a fly on the wall of a few companies I know when the Owner finds out a dispatcher has turned down freight or just told a shipper that " I can't handle it but little Johnny trucking can". That would be the way it should be handled. BUT how many REALLY think it does?

Every company I know books freight and if they have an overflow they sell it. What myself and a few others do is save the carrier from using someone they DON'T know and they don't have to worry about being back doored.
 
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What you do is actually still quite common in Quebec especially. It's not so much in most other jurisdictions now though.

My first few years in the biz was at a trucking company where we had our own trucks and we also had a fleet owner that worked for us where we loaded them both ways, but they ran outside of our authority (truth be known, with no authority at all, pure renegade). Back in that day, it was harder to track compliance and hard for auditors to pinpoint you when that happened. But that's a long time ago.

The thing now is that with so many of the larger shippers checking everyone out for CT-PAT, FAST, PIP, and CSA2010 you really have to be above board in order to be able to do business on that level.

One of the things CSA2010 is designed to do, sad to say, is to weed out the one truck operations ... it's mainly the insurance companies behind it because they equate low compliance with high risk, and either price insurance accordingly or refuse to insure.

Also, when a broker is checking a carrier out, they would immediately check the SAFER stats which would indicate CSA2010 compliance even if no audit has occurred yet. One of the things that are red flags to brokers are SAFER stats that pull up one truck with either no inspections or a very small amount of them, because there's no way to tell if it's one hard-working independent trucker or a 'double-broker' scammer that represents itself as a trucking company unless there is a personal relationship ... usually there is not.

I'm actually surprised that independent truckers still want to run under their own authorities and insurance, mainly because the administrative cost of the compliance is too much without multiple units to amortize over.

That said, when your employer is loading you, they are obligated to let the broker/shipper know it is under your authority and not theirs. Once they don't do that, trust is breached. There are too many monsters in the closet for not enough cookies for it to be worth the risk any more.
 
Vague terminlogy

Again I re -iterate my definition.

The term is usually used in association of the non payment of an invoice when it has gone through the hands of several freight brokers.

And, again there is a big distinction here with carriers.
Carriers will only sell their excess freight or service their customer by selling the freight that the client has going into an area they do not service.
The carriers goal is to maximize the efficiency of their fleet, and hence increase profit.

The brokers ideology is to maximize revenue by selling to the lowest bidder!!

As for loaders and other freight brokers.

You should start hiring staff real quick if you want to follow up on all the authorities of carriers that sub contract part of the shipment; be it at delivery or pick up. The task would simply be impossible. When your carrier cannot carry out all his pick ups on a friday afternoon , he will call in an outside agent (*with his own authorities) to carry out the excess pick ups. There may be several agents.
The carrier is not going to phone everyone and tell them his agent is picking up.

Take a carrier such as Maritime Ontario, all their local pick ups in Montreal are carried out by Alexcaliber. I am sure that few of the clients know this. Others such as Demark work for a multitude of Canadian LTL carriers.

This is the norm in the LTL industry.

IF one deals with FTL only , it can be easier to control.
 
It is unfortunate Alx, that you have such a mis-guided view of how a professional brokerage firm operates. Revenue is not maximized by "selling to the lowest bidder". Long term relationships with our customers maximizes revenue and long term relationships are maintained by taking care of your customers freight as if it was your own. That means knowing who is hauling it and that they have proper authorities, insurance, etc. The quality carriers we deal with always inform us whenever another party is involved in one of our freight movements and they let us know well in advance so that we can determine the suitability of the other party. A carrier who sells off his excess freight is a broker, rightfully taking care of his customer's needs....hey, that sounds just like what we do!
 
Loaders

Please do not get me wrong,

I am not dishing Freight brokers in general, mainly the little pieces of human **** that work out of their basements in Quebec and UPS stores in Ontario.

No transport company can run efficiently without working with legitimate freight brokers.

May I re -iterate that our BEST clients are freight brokers, with whom we have developed long standing relationships over the years, carrying out weekly business.

Of course these brokers are in business for the long run and vigilant when it comes to which companies they sell their freight to. I am sure that they might be mislead into giving their freight to another party that then sells it , but this is certainly frowned upon!!!

I AM CERTAIN THAT YOUR COMPANY FALLS INTO THIS CATEGORY!!

The problem lies , thankfully with a small minority of freight brokers that subsist from double brokerage, these are the parties that drag rates down and eventually do not pay the carriers.

Why freight brokers more than carriers?

Simply because of the ease of entry into the industry. I am not aware of the criteria for elsewhere in Canada. In Quebec one simply has to purchase an old beat up 5 ton that passes the DOT inspection, and a freight broker you are!!!
 
Thanks for the discussion

Hi guys Just got home from anouther trip. Pulling freight for the ONE company that I haul for.

THEMAN
I was around during the " good ol days " As one of the original wild catters in the 70's - & 80's. I got my own authority in 1984. Back when it was a expensive thing to do. I have had my own clients as well as pulling freight for other carriers over the years. But I have always wondered how others felt about guys like me who did this type of work.

I know most of the so called BIG carriers. Know the owners, watched them grow. Some getting bigger. A lot more fell by the way side after a metor like growth. Almost all of them started out as wildcatters, bootleggers What ever name you care to put on them. NOW most would never admit they had there start that way. NOT ME I HAVE ALWAYS BEEN LEGAL BULL CRAP. Guys like me have been in this business as long as there have been trucks running over the road. It is unfortunate that with the new laws on the books today that the one truck/ trailer company IS on the way out. Thank goodness I am 64 yrs old and will probably have to retire in anouther 10 yrs or so.

ANYWAY thanks for trying to clear this up. I hope I at least got your heads thinking about guys like me out here doing the EXCESS work.
Tramp
 
I'm going to weigh in here. Not too long ago I got accused of double brokering. A guy that I worked back and forth with called me. He had a truck with no load, and he had let his link expire. I got him a load, told the fairly reputable company's dispatcher exactly what I was doing, and all was good. I even told him the pickup carrier's name. Problem was, dispatcher dude failed to note it in his notes.
When the time came to be paid (not on delivery or invoicing), I got the call, because my acquaintance used his own PARS etc. They refused to pay me, had the ultimate guy rebill them, and on top of that reset their 45 day payment clock to receipt of his bill.
They accused me of double brokering because the end carrier was getting less than I got. NO KIDDING. I kept 90 bucks, which was the agreement me and the other guy had all along.
To make a long story short, I think the double brokering definition is in the eye of whoever is paying. Its OK for them to do it (al la G Roch), but if you are a little guy with no clout, beware.
 
Although this whole scenario seems to have taken place "between friends", it reads as a definition of double brokering. You took a load off Link and sold it to another trucking company and made a profit doing it. The broker that gave you the load was only doing their job by checking the carrier name on PARS versus the name they contracted with In this case, it would seem that you were up front with the broker and told them it was not your truck hauling the freight. In retrospect, maybe it would have been better to have your buddy deal directly with the broker. They would know who was hauling their freight and they would have your buddy`s insurance and authorities for next time. Once your friend was paid, he could slip you the 90 bucks for your `trouble`.
 
Loaders is a smart man I swear. That is exactly how we do things over here. If a local carrier that I know well, is stuck somewhere in MB lets say, because they are not familiar with these parts of the country, I usually post on the link for him, call the company, get the info, and tell them that I will forward this information onto the carrier I'm helping and that he will call them shortly.

And then if need be, ask for a little something to compensate for the effort.
 
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You know,
I have done the exact same thing although I post in the notes the driver's name and phone number so that the load broker can call and deal direct. I have never taken anything for my 'efforts' as I would consider that double brokering myself. Just a healthy heap of you owe me next time!
 
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Why not just work your own deal with the carrier and run under their authority? Problem solved.
 
Authority

A Carrier's authority is his meal ticket. It is not to be taken lightly, especially since CSA has been implemented.

If an entity that operated a single truck persists to do so in this market, that person is very independant and runs by his own rules ( I know quite a few of these operators).
I am not sure I would want them running under my authorities without a very strict contract outlining responsibilities.
 
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