What Can shippers do to minimize the Fin. fallout of Double Brokerage?

[frtbrkr]

Hi Brokers.

There are several discussions here and in the real world as to what can be done to avoid "Double Brokers" taking our customers freight.

Let's be real, even if they pay the actual carrier on time, it's still illegal, unethical and a violation of contract to Double or "Co-broker" (a fancy term).

We - the Brokers - take seriously the Due Diligence process when onboarding a new Carrier as well as to monitor the carrier even after. It's our job and duty to protect our customer's internist and the safety of the general public by ensuring the Authorities, Safety Rating, insurance, etc. of our Carrier base.

As "Intermediaries" (match makers), we are arranging Freight for the shippers by finding them trucks. We are not superman, we cannot not expected to know "exactly" what our carriers are going to do with the Load-Sheet sent to them....

We can check and doublecheck the information available to the general public. we shall have systems in place as to how our OPS team sorts and approves Carriers, but we still cant control what's going to happen.

The problem is that the Law, the insurance industry and the rational is one one aside, but the customers expectation as on the other side....

The Customers doesn't want to know anything, they want it to be picked and delivered on time with no problems whatsoever. If the Hauling Carrier which wasn't paid by the "Double Broker" is collecting from the shipper/receiver, then our customer will turn to us and either deduct payment or stop doing business with us altogether. Their perception is that the Load Broker did something wrong, how and why has yet to be explained.

Right or wrong, that's what they are doing, they are expecting something which is not in our control and the law doesn't see this way either.

As match-makers, we have to arrange for the match. We tell our authorized and approved carrier where to Pickup from and deliver to. And we should notify the shipper which trucking Company was hired for their load. Once we do that, our job has been mostly completed, we did the match.

The rest of the work, such as Tracing, being busy with Waiting Time, Customs issues, POD collection or Claims is a Value Added service, the main task has been completed once we arranged for the match.

If the carrier chooses to P/U at another location, we are not obligated to pay, right? because the carrier disrespected the MATCH we arranged.

If the shipper chooses to load a Van which is hooked to another tractor, not to the one we hired, we shouldn't be obligated to them either.

Even if the shipper isn't the paying party (receiver is or a 3'rd party is), if we email the shipper with the Carrier Name, they should load the cargo only if our matched Carrier shows up. Otherwise, they are risking loading their cargo on a truck which is wither not fully insured, not authorized, poor safety rating or may come back to them for payment in the event of Double Brokerage.

I would like for all Load Brokers to have a legal disclaimer on the email sent to the shipper, where not only will it contain the full LEGAL NAME name of the Hired Carrier but it will clearly stipulated the consequences which the shipper will have to face in the even they load the fright into a diffident carrier/truck. It shod clearly indicate that even the Driver says "we are the same company" or we are "Partner carriers" or any of these lies, it should not be loaded unless they have written approval from he load Broker to load.

If this can be implemented, the following will hopefully happen:

#1, Carriers will be turned away. This will protect them from none payment or it will allow them to building a relationship with the real Load Brokers and bypassing the Double Brokers. (The profit of the Load Broker will be split between the Load broker and the actual Carriers, a real WIN/WIN situation).
#2 The Double Broker will get caught prior to loading disabling them causing any damages to anyone.
#3, Actual Carriers will always get paid.
#4, In the even that shipper loaded it anyway because they didn't care or where in a rush and then they are receiving collection letters, the Honest Load Brokers will have their hands clean as they can prove that it was the shipper who didn't respect the "match" as expected and notified.

I have a Dream! that one day Double Brokers will be eliminated from the Transport Industry, the same way it doesn't exist in the industries of Customs, Real Estate, Stock, Insurance or any other Brokers fields.

Load Brokers, please chime in.

 

[frtbrkr]

Those who voted for NO, do you care to explain?

 

[LrgCar]

No, because adding legal disclaimers like this when it's already law will spook potential and existing clients. You as the freight broker need to do your best to prevent any situation to get to the point where your customer has to pay twice. Educate your customers, and dont scare them with legal jargon, I'm sure they would appreciate a heart-to-heart conversation with you to understand how DBs work and what harm they cause and I'm sure your customers will be more than happy to implement this. All of our customers do this in the case we have to outsource and to be honest we only had any issue once where it was a local move and the dock workers didn't check and you know what we did? we paid the ACC carrier and took the loss and our customers never heard of it because this business is a lot about maintaining relationships not only with your customers but with those carriers that allow your customer's freight to be moved.

 

[frtbrkr]

No, because adding legal disclaimers like this when it's already law will spook potential and existing clients. You as the freight broker need to do your best to prevent any situation to get to the point where your customer has to pay twice. Educate your customers, and dont scare them with legal jargon, I'm sure they would appreciate a heart-to-heart conversation with you to understand how DBs work and what harm they cause and I'm sure your customers will be more than happy to implement this. All of our customers do this in the case we have to outsource and to be honest we only had any issue once where it was a local move and the dock workers didn't check and you know what we did? we paid the ACC carrier and took the loss and our customers never heard of it because this business is a lot about maintaining relationships not only with your customers but with those carriers that allow your customer's freight to be moved.

Great Points

We have these discussions with our customer, that's the easy part.

The challenge is when the shipper isn't our customer, our customers can send us to varuis Shippers and we want to ensure the Shipper is doing the right think. This can help protect ourselves and our customers.

if the AC is coming after our receiver, the receiver will have the tool to deduced it back from their shipper, the shipper wont be able to claim innocence when there is proof they where told what to do.

Our job is to be a "matchmaker" and we did. If the shipper "chose" to load it to as diffrent company, let them be responsible.

Right?

 

[LrgCar]

The challenge is when the shipper isn't our customer, our customers can send us to varuis Shippers and we want to ensure the Shipper is doing the right think. This can help protect ourselves and our customers.

if the AC is coming after our receiver, the receiver will have the tool to deduced it back from their shipper, the shipper wont be able to claim innocence when there is proof they where told what to do.

Our job is to be a "matchmaker" and we did. If the shipper "chose" to load it to as diffrent company, let them be responsible.

Right?

Call the shipper, that's what we do. Most of the time we are in an email with the shipper if it's a pickup for our customer. It's easy to add in there. And yes definitely if they still load someone that isn't the intended carrier it's on them and if it's something that is worth pursuing they will also be named in the lawsuit. In those circumstances, you've already lost the customer.

 

[frtbrkr]

Call the shipper, that's what we do. Most of the time we are in an email with the shipper if it's a pickup for our customer. It's easy to add in there. And yes definitely if they still load someone that isn't the intended carrier it's on them and if it's something that is worth pursuing they will also be named in the lawsuit. In those circumstances, you've already lost the customer.

We don't call the shipper, we email them.

I'm not sure I'm going to loose a customer if the shipper loaded their freight to a company not sent by us.

Well, if another Broker wouldn't mind whom the shipper is loading and they will even accept the loss regardless then yes, I lost a customer.

But if responsible Brokers are starting to educate their customers and shippers as to their legal obligation, we may have a chance to bring this to an end.

We act as if DB is an unstoppable problem, its not.

When I explain rules about claims or safe loading to our customers, I would always explain them how the industry works or what the law says.

I never insist about our Policy rather about the industry in general.

I may go even further, I tell them that the rule applies regardless if they use us as the Broker or any other Broker.

Its free general honest advice, once you take away yourself from the conversation and you make it about their protection, they process it differently.

I hope that more and more of us would start doing the right think without fear or favor.

 

[MikeJr]

100% yes, any freight broker worth their weight will do the following:
- educate their client about the importance of only loading the carrier that the broker advises is coming for their shipment (for every shipment)
- find out what commodity the client ships and if there are several ensure they know per shipment what's going on the truck so you can tell the CARRIER what they will have on their truck.
- find out, maintain, update and share important information about shippers/receivers with their carrier partners so they can service all parties to their best ability.
- have daytime and after hours contact information for carrier, customs broker and customer in case it's needed.
- etc.. etc., etc.

There is a long list of things that good companies should do and the above plus tons more is what a good broker will do. The problem is it's still the dude on the dock's responsibility to actually check the side of the truck before loading and sometimes they are too busy or too lazy. You would get excuses like 'driver has the correct pickup number and consignee'. People will say anything to cover their ass. I've seen a bunch of issues all arising from people rushing to get shit done and not thinking along the way. We all have. Slow down, pay attention and do your job properly is my only advice. If no one cut corners there would be less issues.

More directly to this thread: an email to your customer/shipper with a disclaimer that says you aren't liable for a list of things no matter what they are won't do anything to change what the laws are but it will probably piss off your customer. Everyone want's someone else to be liable, right? Instead you should be focused on ensuring that your clients freight is always on a trusted carrier's truck. Follow your list of procedures for onboarding new carriers, if your spidey senses are going off don't tender the load. Don't be scared to tell the client that hey we've only found one truck close to your load in northern FL and the guy seems sketchy. We're working on this and will come up with the right option. I know it's all easier said than done, but a strong trusting and honest relationship with the client means you can have open dialogue. I hate to suggest this. but if you are an exclusive provider for a shipper ask them to install cameras that you have access to so you can check the truck pickup up in real time. The more you can do yourself means you don't have to rely on others.

Anyway, I gotta get some work done...
Keep well,
Mike

 

[loaders]

Well said. This idea of looking for people to blame after the fact is useless and not very productive. The right way to prevent bad things from happening, is to take the correct actions beforehand. Be proactive, not reactive. I know, I know, it is all easier said than done, however having iron clad procedures that are followed each and every time, especially when dealing with a new carrier, or a new customer, can dramatically reduce the chance of getting burned. My advice is, do absolutely everything you can possibly do to prevent getting defrauded, and then let the law take care of the rest.

 

[frtbrkr]

100% yes, any freight broker worth their weight will do the following:
- educate their client about the importance of only loading the carrier that the broker advises is coming for their shipment (for every shipment)
- find out what commodity the client ships and if there are several ensure they know per shipment what's going on the truck so you can tell the CARRIER what they will have on their truck.
- find out, maintain, update and share important information about shippers/receivers with their carrier partners so they can service all parties to their best ability.
- have daytime and after hours contact information for carrier, customs broker and customer in case it's needed.
- etc.. etc., etc.

There is a long list of things that good companies should do and the above plus tons more is what a good broker will do. The problem is it's still the dude on the dock's responsibility to actually check the side of the truck before loading and sometimes they are too busy or too lazy. You would get excuses like 'driver has the correct pickup number and consignee'. People will say anything to cover their ass. I've seen a bunch of issues all arising from people rushing to get shit done and not thinking along the way. We all have. Slow down, pay attention and do your job properly is my only advice. If no one cut corners there would be less issues.

More directly to this thread: an email to your customer/shipper with a disclaimer that says you aren't liable for a list of things no matter what they are won't do anything to change what the laws are but it will probably piss off your customer. Everyone want's someone else to be liable, right? Instead you should be focused on ensuring that your clients freight is always on a trusted carrier's truck. Follow your list of procedures for onboarding new carriers, if your spidey senses are going off don't tender the load. Don't be scared to tell the client that hey we've only found one truck close to your load in northern FL and the guy seems sketchy. We're working on this and will come up with the right option. I know it's all easier said than done, but a strong trusting and honest relationship with the client means you can have open dialogue. I hate to suggest this. but if you are an exclusive provider for a shipper ask them to install cameras that you have access to so you can check the truck pickup up in real time. The more you can do yourself means you don't have to rely on others.

Anyway, I gotta get some work done...
Keep well,
Mike

To make sure the right truck is loaded we do the following:

- We ask the driver to ID with his company name on behalf our of our company name.
- To reference the destination it's going to. (on blind shipment, the blind delivery company name).
- When there are multiple deliverers to the same destinations, we either insist for the shipper give us a "P/U ref#" or we provide them AND the carrier our Load # to be used as the "P/U Ref#".

I'm not asking to send out one blast email to all our customer/shippers. We want to add a clear disclaimer on each e-mail to the shipper when we give them the Carrier name so they know the importance of loading it to the right carrier and how to check it.

Understand that they are not only risking none-payment by the DB. What if the AC has a poor safety rating or insurance/authorities isn't up-to-date. God forbid something happens, the shipper will be held liable and wont be able to came back to us if they loaded it on a Carrier other then the one we had notified them to load.

The law is not only clear but it make sense, there is a reason the shipper is liable because it's "their " responsibility, they are the last line of defense in case the LB did everything right but the hired carrier still chose to DB it.

To say that the LB is required to a better "due diligence" is a loaded statement. Is the LB required to check carrier411, Inside Transport? FB pages? any other blog? i mean where does it end?


How many times are these sites not updated? how many times do you realize your loads where DB'd after the 4'th or 5'th load given to the carrier you trusted? how many times did you see threads on inside transport on carriers which you gave loads to but they always paid the AC so you had no way to find out they did if it wasn't for inside transport?

The law is designed to protect the AC and puts the responsibility on the sipper. The shipper trusted the LB (or the shippers receiver trusted the LB) and that's how it should be. If the shipper violates that trust by loading a none-matched carrier, they should be responsible.

The problems isn't with the law, the problems is that the LB's are afraid to put the responsibility where it belongs because others LB's will take the customers until they get burned.

If it becomes normal procedure for all LB's to have the same disclaimer educating the shipper/customer of their legal and rational responsibility (you don't say that it's your policy but rather what the law requires from them regardless who the broker is), we can hopefully make a difference and eliminate DB.

No other Brokerage service has this issue except for transport brokers, it's our fault, not the DB or the AC. We - as a community - should be clear with our customer and shipper as to what's expected from us and them. If it's point out that those rules are there to protect them and that it's not your policy but it's the law which applies across the board, it will be appreciated and admired. Most shippers don't know it which is why they get frustrated on us when they find it out after the fact.

It's in our hands as LB's to make it happen, we play a valuable role in the supply chain and we should be asking all related parties to respect that.

Inside Transport maybe not be the perfect forum to change this but it's worth trying.

 

[Jim L]

As I mentioned in the other post; an extra sheet added to the BOL at the shipper with the Load brokers name address and contact information including after hours would fix a lot of the issues. Carriers would just ask the drivers to send that in with any paperwork and the dispatchers should be able to confirm. You can also ask the receiver when updating them about anticipated arrival date to staple one to the BOL upon delivery. The invoice staff will see it. If you do both you will fix the interliner issue as well.
(If it were me I would put it on my letterhead)

 

[Michael Ludwig]

Let's be real, even if they pay the actual carrier on time, it's still illegal, unethical and a violation of contract to Double or "Co-broker" (a fancy term).

I like to think I am fairly familiar with transportation law, but I'm in askance of this one ... where in the law does it say that double brokering is illegal?

 

[Michael Ludwig]

The problem is it's still the dude on the dock's responsibility to actually check the side of the truck before loading and sometimes they are too busy or too lazy.

The success or failure of the entire supply chain rests solely on the shoulders of the lowest paid member in the process ... the lowly dock worker.

 

[frtbrkr]

I like to think I am fairly familiar with transportation law, but I'm in askance of this one ... where in the law does it say that double brokering is illegal?

Well, if they don't have Broker authority (DOT and/or provincial) then it's illegal.

It's a clear violation of the Terms & Conditions of Carrier-Broker agreement and/or the Load-sheet.

 

[Rob]

Well, if they don't have Broker authority (DOT and/or provincial) then it's illegal.

It's a clear violation of the Terms & Conditions of Carrier-Broker agreement and/or the Load-sheet.

How many by the book brokers have the Ontario by law trust account? Maybe 10 maybe. Brokering freight is probably one of the most unregulated industries there is.

I seen somewhere in this thread or the other one that some broker said carriers do not need to broker freight and link should not let us post loads we need to tell our direct customers that we do not have capacity and to give it to a broker. It took me this long to respond as i was too busy trying to get my ass up off the floor i was laughing so hard. Are you serious about that and do you tell your customers and give the loads back if you do not cover within a day? I will answer for you no you do not and nobody does but carrier should give it back instead of trying to cover?? Must be good glue in your part of the world.

 

[Michael Ludwig]

Provincial broker authority? There's no such thing. Regardless, whether you have broker authority or not, there's nothing illegal about double brokering.
A violation of the Terms & Conditions? Are you talking about your Terms & Conditions, or Terms & Conditions in general?

I don't want to be an ass, but it seems like you are guessing at what is legal, or at least wishing it was regulated in the way you think it should work.

Freight brokerage in Canada is not regulated other than in Ontario you need to have a trust account (which I'll bet you don't have), and in Quebec you simply have to register with the CTQ that that's what you do. Freight brokerage in the U.S. is regulated, but really only in so far as the trust account. On either side of the border there are no other "rules" to follow.

The Terms & Conditions of which you speak are created by each broker that wishes to publish same. These Terms & Conditions fall under contract law. For the most part, like 99.999999%, the Terms & Conditions on load tenders issued by load brokers are not worth the paper they are written on, and have a snowball's chance in hell of standing up in court.
The main issues fall to this;
1) The load broker is forcing the carrier to accept the terms ergo in court the greatest latitude in defence is given to the carrier.
2) Legally binding contracts require the signatures of the contractor and the contracted. I have yet to have a load confirmation that I have signed and sent back to the broker counter signed and sent back to me, and I have been doing this for 40+ years now.
3) Even if the load tender was countersigned and returned to the carrier, each company's minute books must authorize the signatories to contract on behalf of the company to be valid contract.

The bottom line here is that double brokering occurs constantly. For the vast majority of the loads double brokered, there's never an issue. Others are simply scumbagged (a new word I just made up). It's those scumbagged loads that attract all the attention and tarnish the industry's reputation.

I am the first to go on record proclaiming that load brokers are necessary to the industry. In fact it is highly unlikely that the supply chain could actually function without them. However, like every industry, there are bad apples.
(Loaders just had a stroke ... someone should call him an ambulance ... LOL)

 

[frtbrkr]

The success or failure of the entire supply chain rests solely on the shoulders of the lowest paid member in the process ... the lowly dock worker.

yes and no.

If the shipper is the customer, we can easier explain it to our POC (Point of contact) at this location, the "lowly dock worker" works for them.

When the shipper isn't the customer, then it's real uphill battle, but it could still be done, if we are innovate and creative.

The idea is to present it to them how this is for "their" benefit + a few broker should start doing it and make it the SOP (Standard operating procedure) so other brokers should be afraid to do it as well. As of now, no one wants to be the only one thereby risking loosing the customers.

 

[tasuinam]

YUP Canada only - I feel everything is double brokered - and the shipper doesn't care...
Canada Post - holiday season ... prime example

 

[frtbrkr]

How many by the book brokers have the Ontario by law trust account? Maybe 10 maybe. Brokering freight is probably one of the most unregulated industries there is.

I seen somewhere in this thread or the other one that some broker said carriers do not need to broker freight and link should not let us post loads we need to tell our direct customers that we do not have capacity and to give it to a broker. It took me this long to respond as i was too busy trying to get my ass up off the floor i was laughing so hard. Are you serious about that and do you tell your customers and give the loads back if you do not cover within a day? I will answer for you no you do not and nobody does but carrier should give it back instead of trying to cover?? Must be good glue in your part of the world.

Hi Rob.

As Brokers we do tell our customers our options and let them decide. We cant pick it up with our own Truck since we dont have one.

As Carriers, you are expected to Pickup the fright with you own equipment. If you cant perform the services your customer expected you to do then be honest with them and tell them what you are going to do instead.

If you do want to DB it and make the money anyway then do it but this proves my point that AC's are the once wishing for DB's to continue, they just want to get paid knowing the honest LB will have to pay it anyway.

(This belongs to the other thread, i just felt to reply not to leave it unaddressed)

Thanks for advancing this important conversation.

 

[frtbrkr]

Provincial broker authority? There's no such thing. Regardless, whether you have broker authority or not, there's nothing illegal about double brokering.
A violation of the Terms & Conditions? Are you talking about your Terms & Conditions, or Terms & Conditions in general?

I don't want to be an ass, but it seems like you are guessing at what is legal, or at least wishing it was regulated in the way you think it should work.

Freight brokerage in Canada is not regulated other than in Ontario you need to have a trust account (which I'll bet you don't have), and in Quebec you simply have to register with the CTQ that that's what you do. Freight brokerage in the U.S. is regulated, but really only in so far as the trust account. On either side of the border there are no other "rules" to follow.

The Terms & Conditions of which you speak are created by each broker that wishes to publish same. These Terms & Conditions fall under contract law. For the most part, like 99.999999%, the Terms & Conditions on load tenders issued by load brokers are not worth the paper they are written on, and have a snowball's chance in hell of standing up in court.
The main issues fall to this;
1) The load broker is forcing the carrier to accept the terms ergo in court the greatest latitude in defence is given to the carrier.
2) Legally binding contracts require the signatures of the contractor and the contracted. I have yet to have a load confirmation that I have signed and sent back to the broker counter signed and sent back to me, and I have been doing this for 40+ years now.
3) Even if the load tender was countersigned and returned to the carrier, each company's minute books must authorize the signatories to contract on behalf of the company to be valid contract.

The bottom line here is that double brokering occurs constantly. For the vast majority of the loads double brokered, there's never an issue. Others are simply scumbagged (a new word I just made up). It's those scumbagged loads that attract all the attention and tarnish the industry's reputation.

I am the first to go on record proclaiming that load brokers are necessary to the industry. In fact it is highly unlikely that the supply chain could actually function without them. However, like every industry, there are bad apples.
(Loaders just had a stroke ... someone should call him an ambulance ... LOL)

Mike, as a QC based Broker, i was unaware that other provinces do not require any authority, thanks for bringing this to my attention. - https://www.pstc.ca/services/operat...sing-usa-canada/freight-fowarder-load-broker/

Canadian Brokers doing Cross-Broder freight are required to obtain US Authorities and a BOND but it's hardly enforced by the Canadian Carriers (i have yet to understand why that is, U.S. Carriers would'nt even spit at you if you don't have Broker authority).

It's frightening (hhhmmm) that we allow this industry to be so deregulated.

Your other points about Contract law is interesting as well, I'll discus it with our attorney.

And last but not least, thanks for pointing out the value of our existence.

 

[Rob]

Hi Rob.

As Brokers we do tell our customers our options and let them decide. We cant pick it up with our own Truck since we dont have one.

As Carriers, you are expected to Pickup the fright with you own equipment. If you cant perform the services your customer expected you to do then be honest with them and tell them what you are going to do instead.

If you do want to DB it and make the money anyway then do it but this proves my point that AC's are the once wishing for DB's to continue, they just want to get paid knowing the honest LB will have to pay it anyway.

(This belongs to the other thread, i just felt to reply not to leave it unaddressed)

Thanks for advancing this important conversation.

Who says I am DB??? You are under some sort of misunderstanding that only brokers have clients?? I do have direct customers as a matter of fact less than 10% of what I haul is broker freight. I send outside carriers into my shippers on a daily basis for some reason you seem to think that as carrier we all live and die by the scraps brokers want to throw us and that is so far from the truth it is laughable.

My clients are all well aware of who will be loading the freight be it my equipment or another carrier and in the loop on the whole process but for you to even think that without it coming from a broker it is dB freight. It is called equipment utilization I utilize my equipment for the best revenue and excess loads are sold on the open market just like you do kind of. Difference is I have equipment and do have the option of maybe not wanting a load to Downtown Nowwhere Idaho but if I cannot find an outside guy I do not have to disappoint my customer as we have the option of biting the bullet but keeping the customer happy by loading it and getting it done. Probably why I do not have to rely on brokers for freight.

Figured out a long time ago and said it here numerous times living and dying by the link you may as well close up shop as the only one at the end of the year that will have made a buck is the brokers.

Lots of great brokers out there that realize we all need to make a buck but far to many that think it is all about them. Hats off to the one's that realize.. FO to those that don't care.

Merry Christmas everybody.