Double-brokering scams cost transportation industry more than $100M per year

  • Double-brokering scams cost transportation industry more than $100M per year

    Double-brokering scams cost transportation industry more than $100M per year

    For more than two years, Joe Howard, who works for a Midwestern logistics company, has been tracking an alleged sophisticated network of load-board scammers posing as legitimate companies.

    He said the elaborate network has created hundreds of fake motor carrier numbers, pretending to have trucks to get the loads from other brokers. Another entity involved in the alleged scheme re-brokers the freight to legitimate carriers that often have no idea the freight has been illegally double-brokered.

    Once the legitimate carrier picks up the load, Howard said the alleged scammers often seek payment from the broker they booked the load with for transportation services or request fuel advances from the brokers before their scheme is discovered.

    Frequently, the legitimate trucking companies that transport the freight have little or no communication with the shippers that didn’t authorize the double brokering and sometimes have to fight to be paid, if they are paid at all.

    Dale Lenz, owner of Story Express of Ames, Iowa, a small trucking company and freight brokerage, said he mainly has dedicated accounts. But on occasion, Lenz said when he posts a load on one of the load boards, he is hammered with phone calls from Southern California area codes that have a connection to Howard’s growing list.

    “Double brokering in one aspect or another has always been around, but this is much more organized than anything I’ve ever seen before and I’ve been in business for more than 20 years,” Lenz told FreightWaves. “There is a widespread fraud going on of shell carriers booking loads from brokers and then double brokering them.”

    Carrier411 CEO Darren Brewer told FreightWaves recently that he estimates double-brokering scams, including fraudulent fuel advances, cost the transportation industry more than $100 million per year.

    Brewer’s company, which allows brokers and shippers to research and monitor trucking companies based on safety, compliance, performance and transportation metrics, diligently monitors its site to prevent double-brokering fraud.

    Oregon-based DAT is one of the largest on-demand truckload marketplace, with more than 249 million loads and trucks posted annually, according to its website.

    DAT spokesperson Annabel Reeves said the company is aware that fraudulent double brokering occurs within the industry and “DAT takes this very seriously.”

    “Double brokering violates a number of state and federal laws, and if we became aware of such behavior and were provided sufficient information, we would contact the appropriate law enforcement authorities or encourage those who brought it to our attention to contact the appropriate authorities if they were more comfortable doing so,” Reeves told FreightWaves.

    Leave a comment

    Required fields are marked *

International Tracking
Facebook
Twitter
LinkedIn