April 30 2018
|
The Journal of Commerce 35 www.joc.com
Surface Transportation
co-brokering and illegal double-bro-
kering comes down to commissions
and communication. In co-broker-
ing, the two brokers will split one
commission and work as a team to
vet the driver sent to the shipper's
dock. The co-broker also often has
the blessing of the shipper.
In double-brokering, each broker
gets a separate commission by
lowering the rate to the driver twice
to build in two margins. Often the
transparency is lacking between the
two brokers, and communication
between the brokers and the shipper
is virtually nonexistent.
But with some due diligence and
a hands-on approach, shippers can
A POTENTIALLY DANGEROUS type of
freight brokering is on the rise as
capacity tightens, a practice that can
expose shippers to liabilities ranging
from cargo loss to deadly accidents,
third-party logistics providers (3PLs)
and truckers warn.
Some use the term co-brokering,
which is legal, while others say it is
double-brokering, which is illegal.
Regardless of the terminology, it is
the act of a broker giving a shipper's
load to another broker instead of to a
motor carrier. In the most controver-
sial form, one broker may unwit-
tingly hand a load to a second broker
thinking it was booking a carrier.
The difference between legal
mitigate some of the chances this
activity will occur with their loads.
Although no one tracks the fre-
quency, anecdotal evidence suggests
the practice is increasing — a reper-
cussion of tight US capacity and rising
truck rates, fueled by the electronic
logging device (ELD) mandate that
prevents truckers from misrepresent-
ing how long they drive and a strong
US economy. US shipments soared
11.4 percent and the cost to move
them jumped 14.3 percent in Febru-
ary on a year-over-year basis, according
to the Cass Freight Index. Spot market
rates rose between 25 and 35 percent
over the past few months versus the
same period in 2017, according to DAT;
contract truckload rates 8 percent
higher than a year ago.
Talk of the practice has picked
up on discussion boards and on
load boards where brokers include
statements such as "No Landstar
calls, please" on posts. Landstar
System, which is one of the largest
for-hire motor carriers and truck
freight brokers in the United States,
defends its activity as co-brokering,
Double jeopardy
Slim line between co-brokering a freight shipment
and double-brokering puts truck shippers at risk
By Ari Ashe
The practice in
question involves
two brokers
each charging a
commission to
move the same
load with one
motor carrier.
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