Is this double brokering?

I know of instances where a carrier has a separate brokerage business.

They will broker a load for a higher price, resell it to his carrier business for a lower rate, then put said load on lease operators within the company under the guise they are a getting 90% of the load.

When in reality, they are often only getting 60% to 70% of the original load.

Called sleight of hand...

 

But if the two are unrelated.

Carrier A books a load with Broker A
Carrier A's truck breaks down and he cannot get a hold of Broker A
Carrier A then finds a new brokerage service (Brokerage B) and gives them the all inclusive rate and Brokerage B finds a new carrier to haul the load

Is Carrier A allowed to subcontract a load to a brokerage outside of its operation or is that against the law?

 

Without looking specifically at the statutes that govern this, and doing so in depth, I can't give you an answer to the legality, beyond if carrier A does not have broker authority, they cannot re-broker the load to broker B. That seems the most likely case, especially if Broker A hasn't a clue who's actually handling the load at any point in the process past Carrier A.

Even if it is, in some magical world, legal - it's shady as *hell*.

 

All of the broker - carrier agreements I signed, prohibited that. So that depends on what Broker A stated in the contract that the carrier A signed.

If someone intents to practice that sort thing as a way a living, I hope they go out of business very soon and completely broke...to the point of living in a tent under a bridge.

 

Hey now, living in a tent under a bridge might not be that bad I guess. There are hundreds, if not thousands, doing that out here on the left coast.

 

Well. I did not mean to be overly brutal, you know.

 

No doubt these people could have made a killing in that time frame between when the rates had fell hard but before shippers knew they had. Or even some brokers.

 

technically Carrier A can't broker the load... it's a carrier not a broker ?

 

Right Carrier A can’t give it to a Broker. Broker A can give it to Broker B who can give it to Carrier ABC or Broker C and so it goes, each alphabet costs a % of Load. Kind of like Jeopardy.Except no one really wins.Carrier ABor C can flip it to Carrier DE or F if He has to in order to finalize delivery due to unexpected circumstances. Like an Emergency. But He can’t just flip freight without Broker Authority.If somehow Carrier F ends up with the load, well He’s just F’d. Legal as long as no one signs a Contract stating otherwise. ie “No Double Brokering allowed”.

 

Oldest Trick in the book