Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EST. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.
Inside this edition: Double-brokering tips; the stats on Valentine’s Day; and 2023 might have its theme of the year.
There is darkness among us. The scourge of the brokerage world that gets everyone at some point in time is double brokering. That’s the unauthorized rebrokering of a load to another trucking company — and it is illegal. Chris Burroughs, vice president of government affairs for the Transportation Intermediaries Association, told FreightWaves, “We talked with one of the largest factoring companies in the U.S., and their latest quote is that double brokering is affecting upward of $500 million to $700 million in freight.”
Double brokering vs. co-brokering. Double brokering is illegal; co-brokering is not. Co-brokering is where two freight brokerages knowingly work together to get a shipment delivered. It’s more or less a partnership between two companies. Everyone in the agreement knows that this is happening, there’s paperwork that’s filed and no margin is being passed on between brokerages.
How to spot the baddies? It’s not easy to recognize the shady characters, but there are some tips for spotting red flags that Burroughs provided in his recent interview with FreightWaves writer John Kingston. New authority? Red flag. Address changes that give the post office whiplash? Red flag. No tracking/willingness to give out cell phones/utilized technology? Red flag. Demanding quick pay, especially when the rate is dirt cheap? You guessed it: red flag. Trust your gut. If someone is acting deceptive or dodgy when you start to ask questions, maybe look elsewhere for coverage. If it’s too good to be true, it probably is.
What to do if you get taken in. According to the Federal Motor Carrier Safety Administration, if you have been duped by a double broker, you can report the incident to local law enforcement or the Department of Transportation or call the Office of the Inspector General hotline. It’s also suggested that you file a complaint with the FMCSA National Consumer Complaint Database. Although there isn’t a chance that much can be done as the double brokers disappear into the night, doing your part to stop someone else from having this experience is the right thing.
Tuesday is Valentine’s Day. Some say it’s the most romantic day of the year, and others contend it’s simply a manufactured greeting card holiday derived from corporate greed. Regardless of one’s personal feelings regarding the day, it’s a significant time in the logistics space. According to the National Retail Federation, over half of U.S. adults will spend roughly $22 billion on candy, cards and flowers for an average of about $164 per person.
As for getting those tokens of appreciation to the right spot, it’s a masterful dance. Over half of the flowers sold on Valentine’s Day come from Latin America. Once they are picked from the field, the clock starts. Flowers are mostly flown into the Miami International Airport since it’s only about three hours from those fields and there are nonstop flight options to just about anywhere in the country, further preserving the petals’ delicate state. The end of January through the beginning of February will always be the peak temperature-controlled freight time outside of harvest season. In the meantime, for those who might have forgotten, it’s not too late to add to the $22 billion of Valentine’s Day purchases.
Market check. Seeing as how it’s Valentine’s Day, it seems appropriate to take a look at the Miami refrigerated freight market. As mentioned, Miami is THE place for imported flowers for the special holiday. That’s the primary reason why outbound tender volumes and outbound tender rejections spiked at the end of January. All those flowers need to get to stores before the big day. Now that it’s here, rejections and volumes should move back to where they were at the beginning of January.
Who’s with whom? I mean that literally this week as we break down some of the union battles in the transportation space. UPS remains in the middle of negotiations with the Teamsters union. The current contract expires July 31, and most shippers are a little concerned about a possible strike and yet another disruption to the already fragile supply chain. Honestly, I can’t blame anyone for looking at alternative options given the insanity of the past two years. While a strike is unlikely, having a backup plan for the roughly 20 million packages UPS delivers a day isn’t a bad idea. We have most of the summer to watch how this plays out.
Teamsters are also gearing up for a fight on the less-than-truckload side with ABF Freight and T Force Freight — formerly UPS’ LTL division. The end of July could be a real bad time as the dockworkers’ contract hasn’t been settled either. Good thing CSX and some railroad workers have reached agreements on sick leave, right? Maybe 2023 will become known as the year of labor negotiations.
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