It’s no secret that freight fraud is on the rise, and one of the costliest examples is the illegal act of double brokering. Whether you are actively involved in booking freight or want to better understand the issue, we are here to provide fundamental insights on what double brokering is, what to look for when booking a carrier, and assessment tools and best practices to help prevent it from happening.
The TIA (Transportation Intermediaries Association) clearly defines double brokering as, “…when a carrier accepts a load and then rebrokers it to another motor carrier. This is not a legal practice. Likely, the motor carrier that rebrokers the load is not authorized or in compliance with Federal Motor Carrier Safety Administration (FMCSA)”. Once the other motor carrier delivers the load, it can lead to potential risks of fraud, theft, financial losses, and compliance issues.
3 of the most common red flags to look for when booking freight:
- Carrier will not talk on the phone: This may sound simple, but it is one of the biggest red flags when booking freight. If the carrier insists on only communicating via email and avoids phone conversations, it could be a sign that they are trying to avoid accountability and hide their identity. Lack of direct communication can lead to misunderstandings and hinder problem-solving efforts should double brokering occur.
- Will not set-up tracking: Tracking shipments is one of the most important steps for ensuring transparency and accountability. Someone who resists setting up tracking systems may be trying to hide something, such as double brokering or unauthorized rerouting of shipments.
- Records do not match (or exist at all): Mismatched documentation or conflicting information about carriers and routes should raise an immediate red flag. Thoroughly review all documentation provided by carriers to ensure accuracy and reliability. Inconsistencies in records could indicate negligence or intentional deception, both of which pose risks to the security of your freight.
If you notice any of these three red flags, further assessment of the carrier is needed before tendering the load. Below you will find tools and best practices for carrier assessment.
Carrier Assessment Tools and Best Practices
- Carrier Vetting: Actively vet carriers thoroughly to ensure they meet strict criteria for reliability and compliance. Background checks, verifying licensing and insurance, and obtaining references are crucial steps in this process. By partnering with reputable carriers, you reduce the likelihood of encountering double brokering situations.
- Technology for Verification: Embrace technology platforms like Carrier Assure Inc., Highway, and CARRIER411 SERVICES, INC. to authenticate carrier credentials and reputation. These tools leverage data analytics and real-time monitoring to validate carrier compliance and performance and assess risk of fraudulent activity. With advanced verification technology, you can enhance transparency and trust within your logistics network.
- Continuous Improvement and Education: Invest in ongoing training initiatives to educate your team about the nuances of double brokering and common red flags (this can be as simple as putting together a meeting to review the subject and sharing key points from this blog post). Encourage open communication and collaboration among team members to identify and address past and present situations proactively.
By taking a proactive approach and implementing these best practices, you can protect the reliability and integrity of your cold chain freight. Stay tuned for our next blog post, where we will dive deeper into the carrier vetting process and equip you and your team with helpful information to combat double brokering.