What is double brokering?
It is not illegal for brokers to swap freight amongst themselves. Double brokering by the legal definition is when a carrier books a load from a shipper or broker, and does not have a brokers license, then in turn puts it on another carriers truck (his buddy that has a crappy reputation, or does not have the insurance). The problem with this is that the originating carrier is assuming all the liability for the second carrier.
Now the trucker's definition of double brokering is: Anytime there are more than one broker involved in selling me the freight. It really would not matter how many brokers were involved if they all divided their little piece of the pie amongst themselves, but we all know that is not how it works.
Examples:
How it is now
Load from shipper pays $2000.00 for 800 miles, $2.50 per mile to truck
Broker A takes $400.00 leaving $1600.00, $2.00 per mile to truck
Broker B takes $240.00 additional leaving $1360.00, $1.70 per mile to truck
Broker C takes $204.00 additional leaving $1156.00, $1.44 per mile to truck
How it used to be done
Load from shipper pays $2000.00 for 800 miles, $2.50 per mile to truck
Broker A takes $200.00 leaving $1800.00, $2.25 per mile to truck
Broker A then agrees to let broker B split the $200.00 with them
Broker A takes $100.00
Broker B takes $100.00 leaving $1800.00, $2.25 per mile to truck
Broker B then agrees to let broker C split their $100.00 with them
Broker B takes $50.00
Broker C takes $50.00 leaving $1800.00, $2.25 per mile to truck
As you can see done properly all parties still make a small part of the pie while giving the truck the lion's share for their risk.
Hope that helps to clear it up for you.
Now the trucker's definition of double brokering is: Anytime there are more than one broker involved in selling me the freight. It really would not matter how many brokers were involved if they all divided their little piece of the pie amongst themselves, but we all know that is not how it works.
Examples:
How it is now
Load from shipper pays $2000.00 for 800 miles, $2.50 per mile to truck
Broker A takes $400.00 leaving $1600.00, $2.00 per mile to truck
Broker B takes $240.00 additional leaving $1360.00, $1.70 per mile to truck
Broker C takes $204.00 additional leaving $1156.00, $1.44 per mile to truck
How it used to be done
Load from shipper pays $2000.00 for 800 miles, $2.50 per mile to truck
Broker A takes $200.00 leaving $1800.00, $2.25 per mile to truck
Broker A then agrees to let broker B split the $200.00 with them
Broker A takes $100.00
Broker B takes $100.00 leaving $1800.00, $2.25 per mile to truck
Broker B then agrees to let broker C split their $100.00 with them
Broker B takes $50.00
Broker C takes $50.00 leaving $1800.00, $2.25 per mile to truck
As you can see done properly all parties still make a small part of the pie while giving the truck the lion's share for their risk.
Hope that helps to clear it up for you.