Okay, guys. Thank you for being with me again. Module twenty-five. is going to talk about the infamous issue of double brokering and what that means to the industry, the impact that that has on the driver, and how it is viewed by the industry. So this is a particular module that you would want to pay close attention to so that you can avoid the traps or the unintentional flaws or the unintentional uh trappings of falling victim to double brokering okay um so make sure you're paying attention taking good notes okay so let's jump on in let's talk about double brokering what exactly is double brokering so double brokering is the unauthorized re-brokering of a load to another trucking company. This unauthorized activity is a violation of the FMCSA legislation and is considered illegal. Additionally, this fraudulent activity leaves carriers and shippers alike exposed and with no way to mitigate any issues with delays. Okay, I know you're like, okay, so what exactly does that mean? Well, let's talk about it a little more in detail. We're going to break it down a little more. So in transportation, a company can have both two sides. Okay. A transportation company can have two sides to it. This is not always the case, but is certainly the case for many. Okay. So one of those sides is the carrier side. Okay. Which would just be like, you know, a carrier with asset trucks. Okay. And then the other side of that same company can also have a brokerage side, okay, with brokers, okay? So let me give you an example here, okay? So let's say you've got Let's Go Logistics, okay? So Let's Go Logistics has their carrier side, okay? Keeping in mind, every... Carrier company has an MC number, which identifies them, right? And then let's say Let's Go Logistics has their brokerage side. That is a separate MC number, okay? Because all brokerages have to have their own unique MC number as well, correct? So Let's Go Logistics is one company. They are, but they have their carrier side, which is their asset-based truck side, and then they have their brokerage side, okay, which is for their brokers. So it's important for you to understand that piece of this first before we bring it all together, okay? Explain exactly what double brokering is. So just know this, every company in transportation can, not all of them do, but some do have two sides if that's what they choose to do with their company, okay? You can have your carrier side and your brokered side, both under different MC numbers. Now, the way that double brokering works with that is what happens is a broker, okay, will pretend to take a load from another broker for an asset truck. So let's say we've got Let's Go Logistics, right? We're just gonna run with that name, Let's Go Logistics. So let's say a broker from Let's Go Logistics sees a load out on the load board and he calls the person that has put that load out there. And he says, hi, now this is a broker from Let's Go Logistics, okay? So he's looking at loads on the load board and he's looking to find some loads with some really, really good paying rates. So he finds one and he calls on it. He says, hi, I would like to book your Dallas to Houston load for one of our asset trucks, please. Okay, now a broker would not be doing this. This is not the type of work a broker does. This is work that a what? Dispatcher does, correct? so jim this is going to be jim okay jim is pretending to be a dispatcher for let's go logistics when really he is a broker for let's go logistics okay just understand that follow me here so now we have um we have karen and karen is going to say sure I'll send you a rate confirmation over for that load um right now okay so Jim has taken the load from Karen. Now he has Karen's load. Now, the broker then resells the load to a carrier. Okay. So what happens is, who is this going to be? This will be Tim. Okay. We got Tim, Jim, Karen. Now, Tim... sees that Jim has reposted that load back on the load board and calls Jim and says, hi, I see you have a load from Dallas to Houston. I would like to book that load, please. And what does Jim do? He says, sure, I'll send you a rate confirmation over for that load right now. So as you can see here, Jim played both sides of the fence. He pretended to be a dispatcher and took Karen's load, okay, with Karen believing that Jim was going to put that load on a let's go logistics truck. But what Jim actually did is he put that load back on the load board as a broker and then sold the load to Tim for his truck. So this is a perfect example of what double brokering looks like. So let's go into even more detail and break down how a broker would make money by double brokering. So let's say shipper pays a broker two thousand dollars. The chipper pays the broker two thousand dollars. Now, Karen is going to pay the alleged carrier eighteen hundred dollars. OK, because that's how brokers make money. Correct. They take a cut of the of the of the price that was paid to them. They take a cut of that, put it in their pocket, and then they sell off the remaining money, the remaining balance. Right. so karen said you know what I'm gonna get my ten percent profit margin which would be two hundred dollars let me take my two hundred dollars and I'm gonna resell it for eighteen hundred so karen then profits two hundred dollars okay now um so she sells the load to jim right All right. So now Jim has the load. All right. Broker number two resells the load for sixteen hundred dollars. OK. Jim said, you know what, I'm going to get my I'm going to get two hundred dollars out of this because the rate is awesome. And I could easily put this up on the board for sixteen hundred and it'll say it'll somebody will get it just like that because that's still a really good rate for this lane. okay so what happens is them of course uh I'm sorry tim calls jim because he saw that load on the load board that jim posted takes the load from jim And he takes the load for sixteen hundred. So what happened? Jim, because he got the load from Karen for eighteen hundred and he resold it to Jim sixteen hundred. So now Jim has double brokered this load and made a profit of two hundred dollars. OK. And then Jim, of course, has the load for sixteen hundred. So him and his truck made sixteen hundred dollars off of that load. So I wanted you guys to have a visual of this so you can understand how a broker would make money double brokering a load, okay? So this is what double brokering looks like. It was resold twice. It was sold here, okay? And then it was resold here, okay? So I'm sorry, it was sold here first to Jim and then it was resold here to Jim. Okay? So that's what that process looks like, guys. Now, let's talk about the disadvantages of double brokering. Okay? First and foremost, it's illegal, guys. Let's just start there. Okay? You don't want those problems with the FMCSA. You really don't. They can find you, you know, if they find out that you're doing it. Okay? Amongst other things. So, you know, don't even... uh go down that road if you don't have to okay the last thing you want to do is put yourself in unnecessary situations um and risk uh harming your business by doing so okay Next, it can cause extreme delay in payments if you receive a payment at all for that load. Because here's the thing, guys, brokers are very hip to double brokering and they know that it's going on a lot in the industry. And so now what people are doing or what brokers are doing is they are adding... a portion in their contract that says if they find out that this load, that the load that you're taking was in fact double, you double brokered it, they will have the right to refuse to pay you at all. Okay. And trust me, you don't want those problems because if they're not paying you, how are you going to pay the carrier that you resold that load to? The only way you'll be doing that is if you're paying out of pocket, okay? And if you refuse to pay, then guess what? They're going to file on your bond. And trust me, you don't want those problems either, okay? So again, stay away from this. You don't want these problems, okay? Next disadvantage is you could be denied an insurance claim in the event something happens to the load, okay? Because the insurance policy, you know, was supposed to cover whatever you claimed yourself to be, not, you know, somebody else, not another carrier. There could just be issues, guys, trust me. You don't, again, you don't want those problems. You don't want any insurance issues because if something happens and the insurance is unwilling to cover that load because there was inaccurate information in or missing information, they may very well deny that claim. And then guess who's going to be paying for that? Bingo. That's going to be you. So stay away. All right. Next disadvantage is potentially harming your business's financial future from a double brokered load. OK. You know, that's just kind of self-explanatory and kind of broad. But, you know, like I just said, you know, if a brokerage opts not to pay you. or something like that, or if an insurance claims something goes wrong, you're going to be in financial trouble. You're going to be in financial trouble, okay? And certainly another way you can be in financial trouble is if your business becomes blacklisted, okay? If you assumed any involvement, which means if, you know, you... you knowingly took part of a double broker load um you could be blacklisted from whichever brokerage you took that load from and trust me I've seen that play out a lot of times you know for example if you call let's see who's a big brokerage um uh tql total quality total quality logistics. Let's say you give them a call. Hey, I see a little, you've got, it's going to be great for our driver. We'll go ahead and take that. Okay. Well, let's go ahead and give me your MC number. Oh, you know what? I see here in the notes that we are not able to give you this load due to past double brokering. So unfortunately, we won't be able to work with you going forward. OK, that's a big problem because TQL is a big company and they have lots of loads out on the board. every day every day so by you know cutting yourself off from tql you're cutting yourself off from a huge amount of loads that can potentially work for um um you know, work for your, your, your drivers, you know, if you're on the dispatch side of things, if you're on the dispatch side for the company that has two sides and somebody on the brokerage side, double broker to load from TQL, that's going to put the dispatch team in a bad place. Okay. Cause you're going to be cut, literally cutting their foot off, cutting their options off. Okay. So you do that and you get blacklisted, you know, from a significant amount of brokers, that's going to make it extremely hard for you to find loads for your drivers. And one or two things will happen. You'll end up either going under, you know, business shutting down just because nobody's willing to work with you, or you're going to have to, you know, end up rebranding your company, creating a new name for your company and obtaining a new MC number so that nobody knows who you are because you have damaged your reputation and your brand for Let's Go Logistics. So now that nobody wants to work with Let's Go Logistics, we've got to turn our name into Move It Now Logistics or something, you know? So you don't want that, guys. And trust me, it's not worth it. There's so many ways out here, opportunities and avenues to make money in this industry that double brokering is just one of many of them. And it's just not worth it. OK, so that is going to conclude this chapter, guys. As always, I want to thank you for your time and I will see you all in the next video. OK, guys, I am very. satisfied with how she broke down the definition of double brokering and what it does to what it can potentially do to your business and what it all the effect it also can have on the driver himself or herself double brokering number one is illegal Number two, it can put you in a position where it totally banks up your business if you are caught engaging in double brokering. You can become blacklisted. There's a variety of things. And you can even become fined by the FMCSA. So that is something that you definitely want to stay away from no matter what. how tempting it may seem or how easy or ease of access you can have to potentially double broker a load. That is something you want to stay away from. If you know of anyone potentially doing that, you do not want to engage in any type of business with that person or have you or your business connected with that entity in any type of way. So double brokering was thoroughly explained in this video, and it is something that you must definitely stay away from. And that's going to conclude this module.