Another quick-glance broker-lookup tool and more ways to combat fraud and double brokering
Jason Decker of brokerage General Transportation and carrier ART Trucking, based in Van Buren, Arkansas, gave a talk at the Mid-America Trucking show on ways carriers and brokers can work together to combat what he called "one of the biggest issues we have going on right now, causing heartache and headache for everyone." Namely, double brokering and other fraud in spot freight transactions, dragging down rates through misrepresentation/skimming and in some cases outright theft.
Decker introduced a carrier/broker-lookup application for Android devices (iPhone on the way in just a couple weeks, he said) called Trucking 101 that he hopes individual carriers might use to effect. It's also available via the "Load Check" functionality at the Trucking 101 website.
Decker outlined various flavors of fraud and scams out there. Those include:
The various rings doing all of this "are running a good scam," Decker said, "and they know they are. ... A lot of individuals and companies in trucking don't understand it."
In addition, there's another that might rear its head when one of the double-brokering entities is at the end of its rope, whether cut off by the big load boards or otherwise exposed in some way. Decker called it "getting ghosted by the broker" you were dealing with on a load, never paid. "I’ve swallowed that pill a few times" as a carrier, he said.
Overdrive called it the “hit it and move on” scam in the early-2020 in-depth series on broker-nonpayment issues. It invariably results in a broker running up claims on its bond to the point that the required bond's canceled and the company loses its authority. In those cases, the crooks are no longer invested in preserving their authority (or never were to begin with) and simply tender loads to carriers with no intention to pay, hiding their tracks in various ways.
Red Flags?
All parties in a freight transaction need to work together to beat back double-brokering and issues of fraud. Decker went on in his talk to emphasize the simple, obvious value of strong relationships with ethical brokers to proactively avoid these kinds of scenarios, to begin with. And Seaton advises that brokers, shippers, and carriers insist the carrier's name is on the freight bill, via contract addenda. Then insist that the consignee, at delivery, double-check the bill against the truck and driver who arrive to deliver the freight. That simple practice of including the carrier's name on bills of lading has been set aside for a variety of reasons, most having to do with the speed at which spot market transactions have to occur these days in the rush to compete, to book, to deliver.
Factoring companies, if you use them, can be a great resource for gut checks, too. "If your factoring company has a credit check" service, said Decker, "see if they've had issues with the broker." If they won't factor a load from the broker, odds are you work with that broker at your peril.
Decker noted the Trucking 101 app could be its own "gut check" on a broker, giving carriers a quick and easy way to gather a broker's contact information on file with the FMCSA and quickly get in touch with the home office, useful in particular when a scam artist is impersonating a legitimate broker simply to make away with a fuel advance or the entire payment associated with load.
The new Trucking 101 app is a free tool with more limited functionality at present but can be a quick way to make contact with any brokerage's main office number to verify that who you're dealing with is just who they say they are. One thing it's not, yet: A lookup that will reflect current authority status. We used it to query the MC number of a brokerage who late last year was seen engaged in double-brokering, connected to carrier entities who plied load boards for freight. Loads booked by those carriers then "magically" reappeared on the board being offered by the brokerage in question. Not long after this activity was noticed by a different small broker last year, the offending broker and carriers involved lost their authority, in January this year.
The lost authority isn't reflected in Trucking 101 in its current form, but Decker told me today his in-house developers had found a way to get it in there and to expect updates to the Android app and the website in that regard in the next several days. (He's also got plans to build out resources for owner-operators there and elsewhere as a means of further giving back to the industry. His plan is to keep Trucking 101's tools entirely free. As he said during his talk -- this is an expense for us, not part of the revenue-generating operation.)
Just as many brokers may refuse to do business with an owner-operator with a short authority history and/or no inspections in the federal system, truckers might use that 14.5-month period as another kind of gut check/rule of thumb for a broker's time in business as a way to avoid potential nonpayment or involvement in fraudulent double-brokering schemes themselves.
Decker emphasizes all such proactive measures in the current climate. "It will take everyone" in trucking working together to combat double brokering, he said at MATS. "It's a cancer, and the only cure is all of us coming together. It will take you all being out there and active and doing due diligence" on everyone you're working with. "Be proactive. If we as carriers don’t do this, these scammers are going to be able to continue to prey on us. It will put the small carriers out of business, some of the best people in the world working their tails off."
"Without the owner-operators, the small carriers, we’re in a world of hurt." – Jason Decker
Article written by: Todd Dills with OverDrive on April 18th, 2023
https://www.overdriveonline.com/authors/contact/14865268/todd-dills