Buggers finally got me, double broker scam.

It wasn’t a broker in the sense of someone finding a truck. It was a lumber wholesaler buying particle board from the plant in Montana and selling it to his customer, but he didn’t want them to know where it came from because he didn’t want them going direct to the manufacturer. Basically the cabinet place called the wholesaler and said I need “X” of whatever sizes of particle board and the wholesaler purchased it and we hauled it direct to the end customer instead of unloading at the wholesaler and them taking it on their trucks.

 

Customer calls retailer and orders X. Retailer calls manufacturer and orders X for shipment to his location. The retailer then arranges a carrier to pick up from the manufacturer and deliver direct to the customer. At pick up the driver is supposed to use the retailer's location as the ship to. After pickup, BOL gets sent to Retailer who then will make up a new BOL with him listed as the shipper and the ultimate consignee listed before faxing it to the driver.

It's a flaming pain, particularly when the Retailer doesn't let the carrier know it's a blind shipment ahead of time. I distinctly remember my first blind shipment. I was in Eau Clair, WI and the shipping clerk wouldn't give me the BOL even though I had all the right numbers and the trailer number matched because I said it was going to Ripon, WI. On her BOL the consignee was listed as Boca Ratton, FL. After much back and forth between me, Ops, our CSR, their CSR, and the shipping clerk (having to stand out in the drizzle because that was the only place I got cell reception), Ops finally tells me just take it to Boca Raton. Ran down to Mauston, got up nice and early and started running. Just before Madison Qualcomm blows up with "SUPER DUPPER CRITICAL MESSAGE", which scared the poop out of me. First shift CSR got in, saw the notes and freaked the frick out. I got turned around, got to the consignee who was PISSED that I was late and rather rudely taught me about blind shipments.

 

So how do we combat this? Refuse to send docs when a broker asks for them?

 

How can we prevent this?

 

Way I've typically done blind shipments is like this: Customer is a wholesaler buying product from a vendor who has it in stock to sell it to their customer. Customer doesn't want vendor to know who's receiving it, or their customer to know it came straight from my customer's vendor because they're concerned about getting cut out in the middle.

So, customer has me set it up as a blind shipment. I tell the carrier that this is a blind shipment. They'll be presented with a bill of lading (which I or my customer has made) showing it going to my customer. When the carrier has loaded, I'll issue them a bill of lading from my customer's location to the delivery.

If everything goes according to plan, it looks like it's shipped from Cleveland instead of Chicago and away we go.

 

So, my specific customer that requests I use blind shipments regularly has a manufacturer that they work with that is known for *aggressively* going after their customers. They've lost enough business out of the deal that it's a pain, but they still have to use the manufacturer because of cost/availability reasons.

 

what do they manufacture? I’m looking for a new venue.

I never got the manufacturer trying to cut out the middleman, they’re making a sale either way? I have seen that happen at a couple places. The people in the middle, get their ##### chapped, and the people buying it get a better deal.. but have zero faith in said manufacturer because they know they’ll scumbag anybody for a buck aka lack of business ethics.

 

Why do both carriers and shippers look to cut out brokers?

If the shipper pays a broker $2,500 to cover a load, the broker gets a carrier to haul it for $2,000, and everyone is satisfied with their margin then why would anyone look to upset the apple cart?

The answer is in the shipping manager looking to get promoted/a raise. If he can get the loads moved for $2,200 then at annual review time he can say "I cut our shipping costs by 10%". Same thing for the carrier - set it up direct and increase revenue by 10%.

Like it or not, our current economic system rewards short term thinking and denigrates long term choices.

 

A lot of things in the food industry have end user agreements in place. A distributor can't sell X company products direct. So a food "broker" buys and then sells to them under a blind BOL.

 

Without giving the whole game away, my customer fabs some of the product, as well as buying it from the manufacturer for drop shipping. It's steel of a certain sort.

But yeah, absolutely don't get it either. It's like, you take care of the people who brought you there.

I had a similar situation with a customer doing a specific drilling product, until their corporate negotiated an agreement to sell it everywhere. They had territoriality agreements in place, so my customer out in california was technically not supposed to be selling the material there. But that changed about a year, year and a half ago.