Co-brokering is two licensed brokers openly working a load together under an agreement. Double brokering is when a load is re-brokered without authority or without the original party knowing, often by someone posing as a carrier. The difference is authority and disclosure. Federal law requires anyone who brokers freight to be registered with FMCSA and keep $75,000 in financial security.
What is co-brokering?
Co-brokering is when one licensed broker brings in another licensed broker to cover a load, with an agreement between them and in the open. Both are registered with FMCSA as brokers, both have the required bond or trust on file, and the arrangement is allowed by their contracts with the shipper and each other. It is a normal, if less common, part of the business.
The carrier who hauls a co-brokered load still has a broker of record it can identify, a rate confirmation from a licensed party, and a bond or trust behind that party.
What is double brokering?
Double brokering is re-tendering a load you were hired to haul, or brokering a load you have no authority to broker, without the knowledge of the party that hired you. The most damaging version is deliberate: someone poses as a carrier, books a load, re-posts it to a real carrier, collects the payment and disappears.
The FBI describes criminals who book real loads under hacked carrier identities and double broker them as part of cyber-enabled cargo theft. Not every case is that organized. Sometimes a carrier with too many loads quietly hands one to another carrier. Even then, the hauling carrier's contract is with someone who had no right to broker the load, and that is where payment problems start.
Is double brokering illegal?
Brokering freight without FMCSA broker registration and the required financial security is illegal under federal law. Under 49 U.S.C. 14916, anyone who knowingly allows it can face a civil penalty and is liable to the injured party for all valid claims. That liability reaches the company and its officers, directors and principals personally.
The statute sets the civil penalty at up to $10,000 per violation, and FMCSA's inflation-adjusted figure is up to $13,676. A carrier with only carrier authority that re-brokers a load is brokering without broker registration. A load re-tendered against the terms of a contract can also be a breach of that contract, which is a separate matter for the parties and their attorneys.
How can I tell if my load was double brokered?
Map the load chain on paper. Write down every party from the shipper to the receiver, and for each one, who hired them, what their paperwork says and who was supposed to pay whom. Double brokering shows up as a gap: a party in the middle with no right to broker the load, or a name that doesn't match.
Questions to answer for each link in the chain:
- Who tendered the load to you, and what is their MC number and authority type on SAFER?
- Does the shipper or broker named on the bill of lading match the party on your rate confirmation?
- Did the pickup number or appointment come from a different company than the one that hired you?
- Were you asked to pick up under a different carrier's name? FMCSA lists that as a warning sign.
- Who physically picked up and delivered the freight, and what do the BOL and proof of delivery show?
- Who is supposed to pay you, and does that party have a broker bond or trust on file?
Our guide to suspected double brokering has a full worksheet for mapping the chain.
Who pays the carrier after a double brokered load?
Your first claim is against the party that hired you, under your rate confirmation. If that party is a licensed broker, its BMC-84 bond or BMC-85 trust may cover unpaid freight. If it had no authority, you may have claims against the people behind it, and possibly against the original broker or shipper. Which route fits depends on your paperwork, so talk to an attorney.
FMCSA's advice to carriers caught in a fraudulently brokered load is to identify who is paying for the freight. It also warns that holding loads hostage until you get paid is illegal. Don't keep the freight to force payment without legal advice.
Related reading: preparing a broker bond claim and when a carrier can collect freight charges from the shipper.
What should I document if I think my load was double brokered?
Keep the rate confirmation and any broker-carrier agreement, the bill of lading and proof of delivery, every email with full addresses, text messages and call logs, load board posting screenshots, pickup numbers, and photos from pickup and delivery. Write a dated timeline of who said what. Don't edit screenshots or forward emails in place of the originals.
When you have it together, you can file a free complaint. We review the evidence, call it suspected double brokering until the contracts and authorizations are confirmed, and contact the broker named in the complaint for its side. If you need a lawyer, the National Transportation Attorney Network lists transportation attorneys by state.
If you are learning the freight business and want to understand how brokers set up loads properly, Freight University teaches it. Carriers who want a dispatcher who vets every broker before booking can talk with Logistical Forwarding Solutions.