How to Spot a Double Broker in Freight Brokering

Double brokering is an unfortunate challenge that has plagued the freight industry for years, reaching unprecedented levels since mid-2022. Today, I’m sharing five critical ways you can stay vigilant as a freight broker and spot these bad actors before they commit fraud.

Understanding Double Brokering

Let’s start with the basics: double brokering occurs when a carrier, instead of transporting a load themselves, reassigns it to another party without your knowledge. This seemingly simple handoff can lead to complications, including delays, increased costs, and even financial loss. Worse, double brokers often pocket payment from you while leaving the secondary carrier unpaid, resulting in you paying for the same load twice.

Five Red Flags of Double Brokering

To help you avoid this costly scam, here are five major red flags to look out for:

1. No Inspection History: A carrier without inspection records is a major red flag. Even smaller companies go through roadside inspections. If a carrier’s DOT inspection history is unverified or they don’t appear to own assets, you may be dealing with a double broker.
2. Suspiciously High Rates: If the rate sounds too good to be true, it probably is. High offers can signal that the carrier intends to pass the load to another party. They might take a quick payment and disappear, leaving you with unpaid bills and potentially having to pay the second carrier.
3. Mismatched Contact Information: Always verify the carrier’s contact details with the FMCSA. If their email or phone number doesn’t match their registration, it’s a warning sign. Scammers can impersonate reliable carriers by stealing their identity, so watch for discrepancies.
4. Suspicious Business Addresses: Be cautious of carriers using PO boxes or residential addresses as their business location. While smaller owner-operators don’t necessarily need a terminal, larger carriers offering to move multiple loads should have an appropriate infrastructure.
5. Community Reports: Use resources like Highway or the TIA Watchdog list to check for reports from other brokers. These often contain valuable warnings about carriers known for double brokering. Broker forums and industry events are also helpful for gathering insights.

Preventing Fraud in Freight Brokering

Recognizing these red flags early can save your brokerage a lot of trouble and money. Be proactive in checking a carrier’s background and understanding their operations. In the next part of this series, we’ll dive into strategies to prevent double brokers from affecting your business.

Stay Informed: For comprehensive training on starting and growing your brokerage, check out our Freight Broker Basics Course. Learn how to land new customers, build your business, and hire the right people while staying protected from fraudsters.

If you found this information helpful, like, subscribe, and share to help us reach more people like you. See you in the next episode, “How to Prevent Double Brokers.” Check us out on YouTube!