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April 30 2018

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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. Shutterstock.com Trucking | Rail | Intermodal | Air & Expedited | Distribution

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