
Double Brokering: What It Is, Risks, and How to Protect Your Business
Double brokering occurs when a broker or carrier accepts a load and then passes it to another carrier without the knowledge or consent of the original shipper or broker. It's illegal, increasingly common, and can devastate your brokerage through financial losses, legal liability, and reputation damage.
What Is Double Brokering?
Double brokering is when a carrier accepts a load from a broker but instead of hauling it themselves, they broker it to another carrier without proper authorization. This differs from legitimate co-brokering, where brokers transparently collaborate with full disclosure to all parties.
A typical scheme works like this:
- You (the broker) book a carrier to move a load
- That "carrier" has no intention of moving the freight themselves
- They find another actual carrier to move the load
- They pocket the difference between what you paid and what they paid the actual carrier
- Often, they disappear without paying the actual carrier who moved the load
The actual carrier then comes after you for payment, even though you already paid the fraudulent middle party.
The Liability Risks of Double Brokering
When your load is double brokered, you face several serious liability issues:
Legal Repercussions
Double brokering violates federal regulations, potentially leading to FMCSA penalties. As the original broker, you can be held partially responsible even if you were deceived.
Payment Problems
If the fraudulent intermediary doesn't pay the actual carrier who moved the load, that carrier will often come after you for payment. This means paying twice for the same shipment.
Reputation Damage
Shippers don't want to work with brokers who can't properly vet carriers. Each double-brokering incident erodes trust in your operation.
Cargo Liability Complications
When shipments are double-brokered:
- Insurance coverage becomes questionable
- Chain of custody gets broken
- Determining liability for damage/loss becomes extremely difficult
- You may end up responsible for claims that should have been covered by the actual carrier
Red Flags That Signal Double Brokering
Watch for these warning signs:
Red Flag | What It Means |
---|---|
Carrier reluctance to provide direct driver contact | They don't actually have a driver for the load |
Unusually eager acceptance of lower rates | They plan to mark down the rate further when rebrokering |
New authority with minimal history | Often created specifically for double-brokering schemes |
Different company names on documents | Indicates multiple entities handling the same load |
Phone numbers with area codes distant from stated location | Signs of a virtual operation with no real assets |
Inconsistent communication patterns | Different people responding without knowledge of previous conversations |
How to Prevent Double Brokering
1. Implement Rigorous Carrier Vetting
Don't rush carrier onboarding. Thoroughly verify every carrier:
- Confirm active operating authority through1
- Verify insurance directly with the insurance provider (not just checking the certificate)
- Call the carrier's phone number listed with FMCSA (not just the number they provide you)
- Check safety scores and violation history
- Analyze how long they've been in business
- Look for online reviews or complaints
2. Use Clear Contractual Language
Your broker-carrier agreement should explicitly:
- Prohibit double brokering
- Outline severe penalties for violations
- Require the carrier to confirm they will transport the load with their own equipment
- Include a right to verification of the actual driver and equipment
3. Implement Technology Safeguards
Modern technology provides powerful protection against double brokering:
- Use carrier verification systems that can detect potential fraud
- Implement SCAM score detection for new carriers
- Require GPS tracking on all loads
- Verify driver and truck information before dispatch
- Conduct random check calls directly to drivers
- Use platforms that flag suspicious patterns in carrier behavior
4. Maintain Direct Communication
Always speak directly with the driver who will handle your load:
- Get the driver's cell phone number before dispatch
- Call the driver to confirm pickup details
- Request photos of the load at pickup
- Verify the truck/trailer numbers match what was provided
5. Monitor Load Progress Carefully
- Track check calls throughout transit
- Verify locations align with expected route
- Be wary if tracking shows irregular movements
- Set up geofencing alerts for pickup and delivery locations
What To Do If You Suspect Double Brokering
If you believe a load is being double-brokered:
- Document everything—save all communications, load confirmations, and tracking information
- Contact the carrier immediately to request clarification
- If necessary, inform the shipper of potential issues
- Report suspected double brokering to the FMCSA at 1-888-DOT-SAFT (1-888-368-7238)
- File a complaint through the FMCSA's National Consumer Complaint Database
- Consider legal action to recover payments if warranted
Building a Double-Brokering Defense Strategy
The most effective protection comes from a layered approach:
- Establish rigorous standard operating procedures for carrier vetting
- Invest in technology that can detect suspicious patterns
- Train your team to recognize warning signs
- Build a database of verified, trusted carriers
- Maintain open communication with shippers about your security measures
- Stay informed about new double-brokering tactics
Double brokering costs the industry billions annually, but with proper vigilance and the right tools, you can significantly reduce your exposure to this growing threat.