What Is Double Brokering? Warning Signs and Defenses

Double brokering is when the party you hired to move a load hands it to another carrier without your authorization. Here's how it works, why you can end up paying twice, and the checks that stop it.

Double brokering is when the party you hired to move a load gives it to a different carrier without your knowledge or authorization. The company on your paperwork is not the company hauling your freight.

Sometimes the cause is a carrier that took a load it could not cover and passed it on. Sometimes it is fraud from the start. In both cases your freight is on a truck nobody vetted.

How it works

There are three common versions.

A carrier re-brokers the load. A trucking company accepts your load, then posts it on a load board and gives it to another carrier for less, keeping the difference. A motor carrier needs separate broker registration to arrange transportation on someone else's truck.

A fraudster poses as a carrier. Someone uses a stolen or purchased carrier identity to book the load, hands it to a real carrier, collects payment from the broker or shipper, and disappears. The carrier that did the work is never paid.

A chain of brokers. A broker gives the load to a second broker, who gives it to a carrier. If the first broker did not authorize this, nobody at the top knows who has the freight.

Co-brokering is different

Co-brokering is two licensed brokers working a load together under a written agreement, with the shipper's knowledge. It is legal. The difference from double brokering is authorization and disclosure.

Why it is your problem

Risk What happens
Paying twice You pay the party you hired. The carrier that hauled the load is never paid and comes to you or your receiver for the freight charges.
Insurance gaps The insurance you verified belongs to a company that never touched the load. The actual carrier's coverage may be inadequate or may not apply.
Theft If the load was booked with a false identity, the freight may never arrive.
Weak claims With an unclear chain of custody, it is hard to establish who is liable for loss or damage.
No tracking The driver does not work for the company you are talking to, so updates are late, vague or invented.

What the law says

Federal law allows a person to provide interstate brokerage services only if they are registered as a broker with the FMCSA and have met the financial security requirement (49 U.S.C. 14916). Anyone who brokers without that registration is liable for a civil penalty of up to $10,000 per violation, and is liable to the injured party for all valid claims.

The financial security requirement for a broker is a $75,000 surety bond or trust fund.

Warning signs

  • Contact details do not match FMCSA records. The phone number or email on the carrier's paperwork is different from the one in the FMCSA registration.
  • Free email domain. A carrier that claims an established business and writes from a free webmail address deserves a second look.
  • Very new authority, or authority that recently changed hands. Look at the registration date and any recent change of address or officers.
  • The rate is too easy. A carrier that accepts well under the market rate without negotiating may intend to re-broker.
  • No driver or truck details. The carrier cannot or will not give you the driver's name, phone number, truck number and trailer number before pickup.
  • The truck at the dock does not match. The name or DOT number on the door is different from the carrier on the rate confirmation.
  • Tracking is refused or goes dark.
  • A change in payment details. A request to send payment to a new account or a new factoring company, arriving by email in the middle of a load.

One sign alone is not proof. Two or more is a reason to stop and verify before the load moves.

How to protect a load

Before you book

  1. Look up the carrier in FMCSA's records. Check that operating authority is active, that insurance is on file, and that the legal name and address match the paperwork.
  2. Call the number in the FMCSA record, not the number in the email you received.
  3. Get the certificate of insurance from the insurance agent, not from the carrier.
  4. Put a no-re-brokering clause in the agreement and the rate confirmation. It should prohibit the carrier from giving the load to anyone else without written consent.

How to vet a freight carrier covers the checks in detail.

At pickup

  1. Get the driver's name, truck number and trailer number in advance.
  2. Have the dock check the truck. The carrier name and DOT number on the door should match the rate confirmation. If they don't, do not load.
  3. Check the driver's identification against the name you were given.
  4. Make sure the bill of lading names the right carrier. See what goes on a bill of lading.

In transit and at payment

  1. Require tracking and check that the location fits the route.
  2. Verify any change in payment instructions by phone, using a number you already had.
  3. Pay the party you contracted with, at the details in your signed agreement.

If you think a load has been double brokered

  1. Find the freight. Contact the driver and the receiver and confirm where the load is.
  2. Stop payment to the party you booked until you know who hauled the load.
  3. Collect the documents: the rate confirmation, the bill of lading, emails, and the truck and driver details from the dock.
  4. Report it. File a complaint in the FMCSA's National Consumer Complaint Database. If freight is missing, report it to law enforcement and to your insurer.

How we vet carriers

Lancashire Freight is a licensed broker (USDOT 7309891, MC-60788966). Before any load is assigned, the carrier is verified against FMCSA records for active operating authority, current insurance at our $1,000,000 cargo and $1,000,000 auto liability minimums, and safety rating. Every load moves on a signed rate confirmation.

FAQ

What is double brokering?

Double brokering is when a carrier or broker that accepted a load gives it to another carrier without the knowledge or authorization of the shipper or the original broker. The company on the paperwork is not the company that hauls the freight.

Is double brokering illegal?

Arranging transportation for compensation without FMCSA broker registration is a violation of federal law. Under 49 U.S.C. 14916 it carries a civil penalty of up to $10,000 per violation, plus liability to the injured party.

What is the difference between double brokering and co-brokering?

Co-brokering is two licensed brokers working a load together under a written agreement, with the shipper informed. Double brokering is done without authorization or disclosure.

Can a shipper be made to pay twice for a double brokered load?

It happens. If the party you paid does not pay the carrier that hauled the load, that carrier may pursue the shipper or the receiver for the freight charges.

How do I know if my load was double brokered?

The clearest sign is a truck at the dock whose name or DOT number does not match the carrier on your rate confirmation. Missing driver details, refused tracking and changed payment instructions are other signs.

How do I report double brokering?

File a complaint with the FMCSA through its National Consumer Complaint Database. If freight has been stolen, also report it to law enforcement and to your cargo insurer.

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