Double brokering occurs when a broker hands any given shipment over to a secondary broker without the consent of the shipper. It’s a massive threat to the integrity of the trucking industry. Until recently, efforts to identify and fight double brokering have been limited to reports from brokers, public information and basic scoring models.
According to a FreightWaves article, “double brokering has been around since shippers started relying on brokerages to find trucks to haul their freight.” This scam causes a number of problems, including lack of insurance coverage, cargo visibility and payment.
“The issue is substantial, and it has gotten exponentially worse over the last six months as the industry has been in a down cycle — this brings out more fraudsters,” said Melissa Forman, EVP of TriumphPay. “We conservatively estimate that double brokering affects between $500 – 700 million in freight annually.”
Last week, TriumphPay, a leader in transportation payment solutions, announced a strategic partnership with transportation technology provider Highway to “identify and mitigate double-brokering fraud schemes that are increasing in frequency, scale and sophistication,” according to a news release.
“We wanted to create intelligent insights using proprietary data for freight brokers at scale so they no longer have to look at multiple screens or be ‘forensic investigators’ to find suspicious activity,” said Jordan Graft, founder and CEO of Highway. “The opportunity to develop a partnership that produces easy-to-use, proactive solutions is the motivation. We want to get ahead of this problem and stay ahead.”
Nothing of this scale has been released, according to Forman, who said it will combine TriumphPay’s payment data and Highway’s equipment data in the simplest form in order for brokers to easily identify suspicious activity. This is achieved by looking for those that are taking on more capacity than their equipment allows.
“The results are eye-opening. What we now know is true is that what is being reported publicly about double brokerage is just the tip of the iceberg — this issue is so much bigger than we realized,” Graft said. “You have to have this level of data intelligence to create something powerful for brokers.”
Forman added, “It brings together all the needed insights in one place. And it not only helps brokers, but also carriers. The good carriers have had to compete with bad actors and the only way to get rates back where they need to be is to clean out the trash — get the carriers and brokers that aren’t playing by the rules off the roads.”
As it stands, when caught by the Federal Motor Carrier Safety Administration, the consequences of double brokering are trivial. It will pull a carrier’s license, but it doesn’t always permanently stop the issue as the carrier can still apply for a new license and carry on as usual.
Through their partnership, the teams at TriumphPay and Highway are simultaneously working to increase awareness of double brokering and hopefully see higher-level consequences down the road.
“Getting the government to come save us is not going to be the answer. We have to first identify the scope and size of the problem for regulators and bureaucrats to understand what we’re dealing with — they don’t feel our pain,” Graft said. “From there, we have to draw the attention to how it impacts the industry and supply chain as a whole — it’s more than just the financial loss.”
Both Forman and Graft hope that those skeptical in the industry will have a change of heart and consider this partnership a trustworthy asset to their qualification process.
To learn more, visit either company website at triumphpay.com or gohighway.com.