Double Brokering Redux

Andrew Schlegel Contracts, Q & A, Transportation

Question: If a broker tenders a shipment to a carrier and the carrier double brokers or subcontracts the shipment to another carrier, what information does the broker need if the broker was not aware that the shipment had been tendered to another carrier?

Answer: Our recommendation is for every broker to have a written Broker-Carrier Contract that prohibits the carrier from re-brokering the shipment and, further, makes the carrier fully liable for any loss even if it is re-brokered in violation of the contract.

A broker that learns after the fact that one of its shipments was double brokered could do nothing and hope that a problem does not arise. However, this is not the prudent course of action.

A more prudent approach is for the broker to find out as much information as possible about the secondary carrier that actually transported the shipment including, at a minimum, the secondary carrier’s USDOT and MC numbers, corporate or business name and current address, Safety Measurement System (“SMS”) scores, a certificate of insurance, a copy of the primary carrier’s contract with the secondary carrier, and any other information it generally requires of its primary carriers. The broker needs to do its due diligence to ensure that the secondary carrier is an authorized and competent carrier. Most of this information should be available from the primary carrier, but in obtaining that information the broker needs to emphasize to the primary carrier it, as the primary carrier and the party under contract with the broker, is and remains primarily liable to the broker for the double brokered shipment in the event a problem arises.