The author of this two-part story, Matthew Patrick, works in sales and operations with a mid-size fleet and brokerage headquartered in the Northeast. Since identifying double brokering instances with his own businesses, he’s been focused closely on shining a light on its negative impacts within trucking. Read more about him via this link.
What double brokering truly costs trucking is unknown, but estimates put the number in the 10s of millions of dollars. But such estimates likely only attempt to count the frauds that are actually identified for what they are. Meanwhile, hundreds -- maybe even thousands -- of loads are double brokered daily with neither the original broker nor final carrier even realizing it.
Let’s define the standard brokered freight transaction: A shipper hires a broker to find a truck to transport the shipper's load. The broker hires a carrier to service the load, which that carrier then delivers.
In this particular double brokering scenario, instead of the hired carrier delivering the load, they instead give the load to a second broker, and that broker hires a trucking company to deliver the load.
Neither the shipper nor the first broker -- nor the final carrier -- in the chain has any knowledge of the double brokering. Thus there is no chain of custody on the shipper's freight, and the rate the final carrier gets paid now has two brokers’ cuts taken out of it.
To stay under the radar these days, double brokers in most cases we’ve seen are in fact paying the actual carrier who delivered the load, albeit at a reduced amount. Obviously, this sinks rates for real carriers involved in these schemes, reducing profits. By paying the actual carriers, double brokers/connected carrier entities (the italicized portions of the "double brokered" chain illustrated above) avoid detection, establish a credit history, and build a reputation.
Often enough, though, caught one too many times by legitimate brokers or carriers, they run out of road -- their reputation takes a hit as word spreads via social networks and basic word of mouth, and among monitoring services. That is when some implement the “take the money and run” phase of a double broker's evolution. They take the paperwork received from the final carrier and give that to the first “carrier” -- clearly in cahoots with the second broker, maybe even the same person in some cases. That “carrier,” used originally to book the load with the legitimate broker, submits the real carrier’s paperwork as proof of delivery to request quick pay.
