Double Brokering??

@LillyLoo to do this transaction legally truck B should sign a temporary "trip lease" with Trucking Company A which then gives him the legal right to use Company A's US DOT and MC number and makes Company A legally responsible for the load and actions of Truck B. That said, it isn't as easy as it sounds. Company A's insurance must allow for leased on owner operators, a lease must be executed for the single trip and the truck owned by Company B must cover their numbers and display Company A's numbers.

@Avrakotos is exactly correct in why this is a bad idea to do it just between friends. Should there be a claim, even something as simple as a shortage or cargo damage claim not just a major crash, most likely Company A's insurance will deny the claim and so will Company B's insurance leaving the shipper and broker to come after the owner of Company A personally for the damages.

he regulation on trip leasing allows for a lot of leeway compared to a traditional owner operator lease. It can be found in 376.22 at this link Electronic Code of Federal Regulations (eCFR)

 

Exactly. And we all know how many shippers and receivers crush cases and forget how to count. Most places wont allow driver on the dock since Covid - we have our drivers on both sides (asset and broker) write "shipper load and counts on the BOLS" to help avoid any issues. If a load lock breaks and some pallets shift, or the reefer runs hot, there could be a full truck load claim. Not fun when its Avocado.. But thats the whole point of insurance, for those unfortunate situations... and it isnt cheap, so why have it work against you? Its probably so much easier for the 2nd truck to just call the broker/customer and ask to be set up direct, takes like 20 mins tops and covers everyone 100%. Everyone wins that way.

 

You are correct that a motor carrier does need broker authority to give work to another motor carrier. It has not always been that way, for decades carriers could share amongst themselves as a way to get around the old ICC rules on service territories. With deregulation in the 80's forcing a change in how we perceive the trucking firm's role in the movement of freight the practice of interlining was outlawed in 2012 with the passage of the MAP-21 Highway Bill (same time broker reform and bond changes were made).

That said, it is still legal for trucking companies to conduct joint line service where two or more authorized carriers provide movement of freight with each taking responsibility for their respective portion of the movement. To qualify as joint service all motor carriers must physically handle a portion of the movement not just "push paper" as that would be brokering otherwise. Joint line service is very similar to freight forwarding.

As for double brokering being illegal, depends on which point of view you take. Right now the FMCSA has turned a blind eye to the problems caused by double brokering which is why the Transportation Intermediaries Association has asked for some clarification and possible changes to clarify exactly what is double brokering as well as what constitutes a dispatch service. As long as the second broker does not represent themselves as a carrier, or representative of a carrier, when they take the load from the first broker then no law or regulation has been broken. If broker #1 is aware they tendered the load to another broker then they are willingly assuming all liability for sharing that load with a partner.

MAP-21 attempted to address double brokering, and in a way did when it was being done by carriers then passing the load to a sub-contractor (as in the OP's question), but MAP-21 failed to address double brokering between two brokers except to specifically require a broker to declare in writing their position as a broker, freight forwarder or motor carrier [49 USC 13901 (c)]. MAP-21 specifically did nothing to stop the legal, although possibly questionable, practice of "co-brokering" which is often confused with double brokering. There are no current regulations that prohibit two or more brokers from sharing loads amongst themselves if all parties are identified.

It becomes very illegal when they use subterfuge to obtain the load from broker #1, which is the root of the problem with double brokering as it muddies who is legally liable for payment of freight charges, damage claims and ultimate movement of the freight. This causes problems for the shipper, receiver and other third parties such as towing services when clearing up crashes or motor carriers trying to collect on freight invoices when broker #2 defaults on payment.

 

Joint line service is alive and well in the LTL segment. Not real popular elsewhere but absolutely vital to LTL.