Understanding the Role of a Broker

The job of a broker is to marry shippers with carriers. A shipper has a load of freight to be delivered and has no carrier contact, so the broker lines up a carrier to haul the shipper’s load. The broker sends the carrier’s truck to pick up the load and deliver it. The shipper pays the broker, and the broker deducts a finder’s fee and pays the rest to the carrier. At least, that’s the way it’s supposed to work. In many cases, that’s the way it does work.

Not All Brokers Adhere to Ethics

Good brokers work to build relationships with carriers that are dependable, safe, and on time with scheduled pickups and deliveries. Finding suitable carriers and establishing working relationships with them takes time but can be quite profitable in the long run.

Double Brokering

Unfortunately, not all brokers are good brokers. The continent is experiencing an epidemic of brokers who engage in the unethical practice of double brokering. Double brokering occurs when the broker given the load transfers it to another broker to assign it to another carrier without the original shipper’s consent. The bad news is the original broker gets paid, but the carrier often does not get paid for delivering the freight. And that makes double brokering illegal.

It’s a practice that is presently occurring across the US nowadays. And it’s hurting many honest operators who haul loads and fail to get paid. If the carrier is paid at all it’s double payment by the original shipper. Either way, at least one participant gets the shaft. That’s just not fair to anyone involved except the criminal that gets away with it.

The biggest problem is that commercial transporters are faced with the prospect of never getting paid and that’s just bad for honest brokers. Transporters are afraid to work with any brokers except those they have developed dependable and honest relationships with. Likewise brokers must be careful who they deal with.

 

What About Co-Brokering?

There are times when co-brokering is necessary. Sometimes a broker will take on a shipment when the load is crossing the border into another country and the broker needs help from another broker who is versed in their country’s customs documentation and routes. That is perfectly legal and often necessary to get the shipment safely to its destination. Co-brokering is not always due to foreign shipments. Any situation where a broker needs to cover other instances where the co-broker has expertise unfamiliar with what the original broker has, a co-broker arrangement is appropriate and legal. 

The unfortunate situation falls on the shoulders of carriers who are depending on brokers who may or may not have scruples. You want to believe all brokers are honest and you can work successfully with them. But due to all the talk and publicity about double brokering, you feel you are always taking a chance when you need a load to keep busy.

It certainly makes the spot market a less than desirable place to do business. But at times, that’s where money is to be made. Good luck. And always check the background of the broker you want to deal with.

 
Receive the latest news

Subscribe To Our Weekly Newsletter

Receive the latest news

Thank you for Signing Up!