Double-brokering is an increasingly common — and dangerous — issue in the logistics industry. It occurs when a freight broker accepts a shipment from a shipper and, instead of assigning it to a vetted carrier, passes it off to another broker. This second broker then finds a carrier to move the freight. While it may sound like a harmless middleman situation, double-brokering introduces serious risks that can impact shippers, carriers, and the entire supply chain.

1. Loss of Transparency

One of the biggest concerns with double-brokering is the breakdown in communication and visibility. The original shipper may not know who is actually hauling their freight, and the carrier may not know the original source of the load. This disconnect can lead to confusion, delays, and a loss of control over the freight.

2. Payment and Fraud Risks

Double-brokering often involves multiple hands taking a cut of the payment, which can lead to disputes and non-payment. Carriers may end up unpaid if a broker along the chain disappears or refuses to pay. In more extreme cases, fraudulent brokers will steal loads or payments, resulting in financial losses and legal headaches.

3. Liability and Insurance Gaps

In the event of an accident, cargo loss, or damage, insurance claims may be denied if the carrier hauling the freight wasn’t properly authorized or disclosed. Shippers may find themselves liable for issues involving a carrier they never agreed to hire.

4. Legal and Regulatory Violations

Unauthorized double-brokering is a violation of federal regulations. It undermines trust in the freight industry and can lead to penalties, lawsuits, and reputational damage for those involved.

Double-brokering compromises the integrity of the supply chain. It creates confusion, increases risk, and erodes trust among all parties. The best way to protect against it is to work only with licensed brokers, verify carrier credentials, and ensure full transparency throughout the logistics process.