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:

1. You (the broker) book a carrier to move a load
2. That "carrier" has no intention of moving the freight themselves
3. They find another actual carrier to move the load
4. They pocket the difference between what you paid and what they paid the actual carrier
5. 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:

1. Document everything—save all communications, load confirmations, and tracking information
2. Contact the carrier immediately to request clarification
3. If necessary, inform the shipper of potential issues
4. Report suspected double brokering to the FMCSA at 1-888-DOT-SAFT (1-888-368-7238)
5. File a complaint through the FMCSA's National Consumer Complaint Database
6. Consider legal action to recover payments if warranted

Building a Double-Brokering Defense Strategy

The most effective protection comes from a layered approach:

1. Establish rigorous standard operating procedures for carrier vetting
2. Invest in technology that can detect suspicious patterns
3. Train your team to recognize warning signs
4. Build a database of verified, trusted carriers
5. Maintain open communication with shippers about your security measures
6. 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.