Commentary: Putting a Stop to Re-Brokering

Q: I’ve been reading in a lot of your columns lately about problems that seem to arise out of the shipper hiring one motor carrier to handle a load and that carrier brokering the load out to another. On occasions, your columns have involved two or three of these transactions in succession, as the second carrier brokers out to a third one, and maybe even the third one to a fourth.

You always advise that a shipper should prohibit its carriers from this kind of re-brokering. I agree with you 100 percent, and in all our contracts with motor carriers we have a provision that does exactly this. We haven’t had any problems with it; on the rare occasions when a carrier isn’t able to carry the load, it’s always come back to us and told us so and we’ve been able to find an alternate carrier to do the work.

But it occurs to me that this isn’t perfect protection. What’s to stop an unscrupulous carrier from re-brokering behind our backs? I mean, the carrier could tell us it’s going to take the load and then simply hire another carrier, an independent owner-operator, somebody else to perform the transportation.

My question is simple: How could we find out about it if a carrier were to do this? And what can we do to prevent it from happening?

A: Well, that’s two questions (wink), and one of them isn’t all that simple.

Let’s take the easy one first: How can you prevent this? That answer’s easy, too: You can’t. All you can do is make sure it doesn’t happen twice with the same carrier, by enforcing your contract and cutting it off from future traffic on the grounds that it breached the contract.

There’s no way to thwart someone who’s intent on violating an agreement he or she signed any more than there’s a way to prevent criminal acts from occurring. People being people, both things happen a lot more frequently than we might like. All one can reasonably hope to do is uncover the misdeeds after the fact and take steps to penalize the perpetrators appropriately.

When a crime occurs, it’s generally pretty obvious, and the only question is whodunit. For breach of contract, though, there’s only one “who,” so that’s not the problem. The problem is identifying the fact that there was a breach in the first place.

The best I can tell you is eternal vigilance, and you have to pass that word on to everyone who comes into even passing contact with your carriers. If you’ve hired ABC Trucking to do the work and somebody shows up to make the pickup driving a tractor labeled XYZ Trucking, I’d say that’s ample cause to be suspicious.

But suspicion is, of course, a state of mind, and unless the mind of at least one person observing the tractor is engaged, then that state won’t be aroused. If your dock foreman, for example, simply takes whatever paperwork the driver may offer and releases the shipment automatically, any Tom, Dick and Harry can come for it without reference to who’s supposed to have done so.

Your first line of defense, then, is your loading dock (or your security gate if you stage preloaded trailers for pickup). Your workers there should be advised who’s supposed to take the load — probably by means of completed bills of lading — and should be trained to compare that information with identification from whoever actually shows up.

Even that’s not perfect protection, especially if you’re using carriers that lease a significant proportion of their equipment from owner-operators or others. If in doubt, you can always call the carrier’s dispatcher, but will you get a straight story from him or her if there’s truly intent to deceive you?

You also should alert your consignees to who’s supposed to be delivering to them, and urge them to contact you if anyone else arrives instead. You also can check delivery receipts when they’re returned to you — you do insist on that before paying the carrier, right? — for the name of the carrier that delivered.

None of these precautions will cover you against a carrier who’s serious about trying to fool you. But such a carrier will have to involve several people in its scheme — driver, dispatcher, manager and probably others — and the chain of trickery will only be as strong as its weakest link. As long as everyone in your company keeps their eyes open, you’ll be pretty solidly secure.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.
 

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