Double brokering is when a company with domestic freight broker authority “arranges transit” with a 3rd party motor carrier, and then the motor carrier subsequently arranges with another 3rd party motor carrier without the knowledge and approval of the freight broker who originally contracted the motor carrier to move the shipment.
In all cases creates major financial exposures for freight brokerage operations, shippers and the motor carriers involved in the double brokerage arrangement.
FOR MOTOR CARRIERS
Reasons Not To Double Broker
It is in violation of Map 21 legislation
Invalidates coverage the original motor carrier has in place.
In violation of a sound Broker Carrier agreement.
Damage relationships with freight broker client
FOR FREIGHT BROKERS
Reasons Not To Allow Your Motor Carriers To Double Broker
1
Prevents the freight broker from conducting the required vetting of the sub-contracted MC moving the freight.
2
Increase exposures in litigation under negligent hire allegations.
3
Increase exposure in litigation as MC you “arranged the shipment with won’t have coverage in place”
4
Payment problems/ shipment being held hostage
5
Upsets Shippers
How Freight Brokers Can Prevent Double Brokering
Stronger Broker Carrier Agreements
Enhanced vetting to detect double broker risk
Lobbying efforts to engage FMCSA in institution of the Map 21 legislation.
Business model geared for specific industries with smaller network of motor carriers
Report all incidents to FMCSA
Insurance Coverages That Freight Brokerage operations can purchase to reduce exposure associated with Co-brokerage:
Domestic Freight Broker Auto Liability/Third party liability coverage, Contingent Auto liability coverage.
Risk Management Best Practices To Consider
The National Hiring Standard – Legislation intended to support the defense against allegation of negligent hire, review of the actions freight brokerage operation can take that actually lead to safety standards currently not in place by FMCSA.
Risk Vs Reward in Shipper Broker Contracts
Sell the Value Adds only a Freight Broker can deliver to shippers.
Avoiding the nuclear claim, the switch and bait, how are you holding your operation out to shippers drive exposures to allegation of vicarious liability and the nuclear claim
Learn More About Freight Broker Exposures & What Insurance Coverages Protect Them With Our Free Guide
Definitive Guide For Freight Broker Insurance In 2021
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Double Broker Landing Page
3PL XTEND PRESENTATION NOTES
Addressing Illegal Double Brokering
Risks and practical steps freight brokers & motor carriers can take to reduce their exposure
Panel Speakers
Glenn Stebbings
President/CEO
Chris Jolly
Freight Coach
Chris Burroughs
VP of Government Affairs
What is double brokering?
Double brokering is when a company with domestic freight broker authority “arranges transit” with a 3rd party motor carrier, and then the motor carrier subsequently arranges with another 3rd party motor carrier without the knowledge and approval of the freight broker who originally contracted the motor carrier to move the shipment.
In all cases creates major financial exposures for freight brokerage operations, shippers and the motor carriers involved in the double brokerage arrangement.
FOR MOTOR CARRIERS
Reasons Not To Double Broker
It is in violation of Map 21 legislation
Invalidates coverage the original motor carrier has in place.
In violation of a sound Broker Carrier agreement.
Damage relationships with freight broker client
FOR FREIGHT BROKERS
Reasons Not To Allow Your Motor Carriers To Double Broker
1
Prevents the freight broker from conducting the required vetting of the sub-contracted MC moving the freight.
2
Increase exposures in litigation under negligent hire allegations.
3
Increase exposure in litigation as MC you “arranged the shipment with won’t have coverage in place”
4
Payment problems/ shipment being held hostage
5
Upsets Shippers
How Freight Brokers Can Prevent Double Brokering
Stronger Broker Carrier Agreements
Enhanced vetting to detect double broker risk
Lobbying efforts to engage FMCSA in institution of the Map 21 legislation.
Business model geared for specific industries with smaller network of motor carriers
Report all incidents to FMCSA
Insurance Coverages That Freight Brokerage operations can purchase to reduce exposure associated with Co-brokerage:
Risk Management Best Practices To Consider
The National Hiring Standard – Legislation intended to support the defense against allegation of negligent hire, review of the actions freight brokerage operation can take that actually lead to safety standards currently not in place by FMCSA.
Risk Vs Reward in Shipper Broker Contracts
Sell the Value Adds only a Freight Broker can deliver to shippers.
Avoiding the nuclear claim, the switch and bait, how are you holding your operation out to shippers drive exposures to allegation of vicarious liability and the nuclear claim
Learn More About Freight Broker Exposures & What Insurance Coverages Protect Them With Our Free Guide
Definitive Guide For Freight Broker Insurance In 2021
In this guide you will learn:
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