Q&A: Winning the Battle on Re-Brokering

Q: I read your recent article about how to stop re-brokering, and it really is a mess out there. We constantly have carriers who want to make the quick buck and broker even though they promised us to load only on their equipment. They will book and move on without following up on the problems that pop up.

You gave great advice, but over the years of reading your columns, I’ve learned that you just can’t be too careful, so if I may, I’d like to put in my two cents’ worth.

We use Carrier411.com, which pulls carrier safety info and alerts us if the carrier is safe to use. We screen every carrier provided by our broker by running them through the system. We then award the load and alert our shipping locations who the carrier is. Should a different carrier attempt pickup, the warehouse will not tender the freight, and will call us instead. We then investigate to see why a different carrier was sent in.

I’m finding carriers just want to make that quick commission by outsourcing our shipments. They get paid by us quickly and then pay the delivering carrier whenever they feel like it. We absolutely forbid any re-brokering because the carrier in most cases isn’t even performing its due diligence; they will tender the freight to any carrier even if its safety numbers are poor. Acting as a broker, these carriers also claim they don’t need insurance and just need the surety bond.

Oh, and what do some of them come up with? They’re “interlining” the loads with “sister” companies. That’s another crock because our broker will see that shipment posted on the load boards by that carrier.

Needless to say, once we catch these guys pulling these scams, we blacklist them.

 

A: You seem to have an unusual relationship with your broker (I guess you’re using one because you make that reference twice). In my experience, most brokers are pretty reluctant to reveal the names of carriers to which they’re assigning loads — at least not far enough in advance to allow for safety checks, etc. — out of fear the shippers will then bypass them (the broker) and deal directly with the carrier.

Indeed, the usual is for the broker itself to check carrier safety ratings and the like, as well as to maintain its own prohibition against re-brokering by carriers.

The usual also is that your payment goes to the broker, which is then responsible for paying the carrier; so it won’t matter to the carrier how prompt you are with your payment, only how prompt the broker is. Your letter suggests that instead you pay the carrier directly, as was done in days of yore, and your broker’s compensation is handled otherwise.

Be all that as it may, your note is full of good advice. The “sister company” fib, of course, is pretty easy to puncture in several other ways; and in any case re-brokering is re-brokering, however close the affiliation between the carriers. If Carriers A and B are truly aligned, then Carrier B should be willing to lease equipment to Carrier A at need, instead of A farming the load out to B.

But the key to everything you wrote is exactly what I said in my earlier column: Stopping re-brokering has to begin at the loading dock. You say your warehouse is instructed not to tender the freight if an unexpected carrier arrives to pick it up, but to do that they have to know who’s supposed to be coming, and be alert enough to notice if somebody else actually does.

Too often this isn’t the case. I’ve heard of situations where thieves simply borrow, beg or (more usually) steal a truck and drive boldly up to a loading dock to ostensibly pick up an outbound shipment — and the loading dock gives it to them! Needless to say, the load will never be heard from again.

To be sure, most loading dock personnel aren’t that dim-witted; they’ll ordinarily insist on some sort of authorization. But it’s common that either they won’t have a carrier name, only the name of the broker, or that even if they do, they won’t double-check it and withhold the load if the names don’t match up.

By the way, on one count, the re-brokering carriers are correct; they only need a surety bond (assuming they’re authorized to broker), not insurance, for re-brokered loads — which is, of course, another good reason not to allow re-brokering.

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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