This not only creates payment disputes but can also expose trucking carriers and brokers to serious legal and insurance risks.

Best practices

Given the mercurial freight market, trucking carriers must carefully assess each load. In addition to using the FMCSA Carrier 411 website, agents, brokers and insurers should work with their trucking company policyholders to help them adopt proactive strategies to avoid double brokering and cargo theft.

Ensure documentation is complete: Business owners should always obtain a signed rate confirmation before transporting any load. This document should clearly outline the broker’s name, motor carrier (MC) number, agreed-upon rate, pick-up and delivery information, as well as any additional fees. If there is a discrepancy regarding the broker's identity in the paperwork, seek clarification before proceeding.
Utilize reliable load boards: Reputable load boards — online marketplaces that connect shippers, freight brokers and trucking companies — typically provide credit ratings and historical performance data for brokers. Policyholders should steer clear of unfamiliar brokers who lack a proven track record, especially if their offered rates appear unusually high for the route.
Be aware of warning signs: Red flags to watch for when working with a broker include:
- The broker pressures the shipper into a quick pick up without adequate documentation.
- The broker is unwilling to share their MC number or references.
- The load information is incomplete or changes suddenly with respect to details about the shipper and/or receiver.
Foster direct relationships: Cultivating direct connections with shippers and reputable brokers minimizes reliance on unknown intermediaries. Establishing long-term partnerships can significantly lower the likelihood of encountering double brokering or other fraudulent situations.
Partner with experts: With the growing complexities around cargo theft and double brokering, freight business owners should understand the value of working with specialists they can trust across the insurance, IT, legal spaces and more. An insurance specialist who knows the freight sectorcan not only help craft a comprehensive policy that best positions the business should a loss occur but also help assess the company’s unique risk exposures and recommend tailored risk mitigation strategies.
Implement a two-step load confirmation: Before releasing cargo, require confirmation through independent contacts, such as dispatcher and driver, or an emergency contact for a trucker with a solo trucker operation.
Use secure digital communication: Brokers can create their own client portal that scans licenses and requires a photo of the driver prior to picking up a high-value load, followed by contact verification.
Obtain good coverage: Agents, brokers and insurers should also work with their policyholders to help them understand the importance of factoring in recovery costs and operational disruptions when it comes to both cargo theft and double brokering.

Policies can be tailored to cover the costs associated with restoring operations to any pre-disruption state, including downtime, lost revenue and any necessary repairs or replacements. A freight company’s policy should cover the impact of operational disruptions, such as loss of revenue, customer satisfaction and — importantly — any potential legal or regulatory issues. By addressing these factors, insurance providers can offer coverage that better aligns with the evolving risks faced by shippers and trucking carriers, ensuring no coverage gaps exist.

Special Reports /

Cargo theft and double brokering: Two freight industry threats to watch

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