Co-Brokering vs Double Brokering: What You Need to Know as a New Freight Broker

Navigating the freight brokerage industry requires a clear understanding of key practices, especially the critical distinction between double brokering vs co-brokering. While these terms may sound similar, they represent fundamentally different practices with dramatically different consequences.

One can help you scale your business when done right. The other can put your clients at risk, destroy your reputation, and get your authority revoked from the freight industry.

Here’s everything you need to know to protect your business and operate ethically in the freight industry.

What Is Double Brokering?

Double brokering occurs when a freight broker accepts a load from a shipper, then gives that load to a secondary broker without the shipper’s knowledge or permission. This secondary broker then arranges for a carrier to transport the shipment.

The process looks like this:

Shipper → Original broker → Secondary broker (unauthorised) → Carrier

This is where the problem begins. The parties involved become unclear, liability is murky, and the freight is no longer being managed by the company the shipper originally trusted.

Why it’s a problem

• Double brokering violates FMCSA regulations
• The original broker is no longer in control of the load
• It increases the risk of cargo theft, missed deliveries, and unpaid carriers
• There’s often no direct line of communication with the carrier

In most cases, double brokering is considered fraud, and it’s one of the fastest ways to lose your standing in the industry.

What Is Co-Brokering?

Co-brokering, on the other hand, is a legal and cooperative arrangement between multiple brokers who work together to move the load with the shipper’s full knowledge and written consent.

The process looks like this:

Shipper → Broker A + Broker B (co-brokering agreement) → Carrier

This is common among larger freight brokerage companies or in situations where capacity is tight or specialised logistics services are needed. When done right, co-brokering expands carrier networks and helps ensure coverage without cutting corners.

It’s commonly used to:

• Handle overflow loads during peak season
• Cover lanes outside your usual network
• Access specialised equipment or services

It’s legal, but only when:

• The shipper explicitly approves it
• There’s a clear written agreement between both brokers
• All parties understand who is responsible for what

Double Brokering Is a Serious Red Flag

Inexperienced brokers sometimes turn to secondary brokers to cover loads when they’re short on carrier options. But passing freight along without transparency is a quick way to destroy your standing in the transportation industry.

Here’s why it matters:

• Shippers get blindsided when freight goes missing, arrives late, or is handled by someone they didn’t authorise.
• Carriers may go unpaid, especially if the load was passed to a fraudulent broker.
• Your MC number gets flagged, which damages your credibility with load boards, insurance providers, and potential clients.
• It opens the door to cargo theft, as the initial carrier may not even know who’s really moving the freight.
• You could face legal consequences—FMCSA can suspend or revoke your broker authority for participating in unethical practices.

The industry has a long memory. Once you’re associated with double brokering, it’s hard to come back from it.

How to Make Co-Brokering Work

When done properly, co-brokering is a legit strategy that lets freight brokers work together to get the job done without hiding anything from the shipper.

Here’s how to make sure it’s done right:

• Get the shipper’s consent (written approval) before involving another broker
• Sign a co-broker agreement that outlines responsibilities, payment, and liability
• Make sure both brokers are licensed, bonded, and insured
• Maintain clear communication with the shipper and carrier throughout

Like any partnership, choose a reputable co-broker, and only when it benefits the shipper.

How to Spot and Avoid Double Brokering

As a new broker, you must protect your business from others who engage in double brokering.

Watch out for these warning signs:

• The carrier name suddenly changes after the load is booked
• The broker’s email address doesn’t seem valid
• MC numbers don’t match the insurance or contact info
• A broker won’t disclose who the actual carrier is
• Tracking updates stop, or communication gets vague
• Delays in communication, vague updates, or refusal to provide tracking
• Poor documentation from freight brokerage partners

Trust your gut. If something feels off, back out. It’s better to lose a load than to be caught up in someone else’s mess.

Best Practices for New Freight Brokers

If you’re new to the industry, here’s how to stay compliant and build trust:

• Always know who’s hauling your freight
• Never pass loads to another broker without the shipper’s consent
• Use carrier vetting tools and load-tracking systems
• Keep written agreements and clear documentation
• Don’t cut corners because your reputation depends on it

Want a step-by-step guide to set up your brokerage the right way? Our 90-Day Freight Broker Course walks you through setup, compliance, booking loads, building your client base, and much more.

FAQs

1. What is an example of double brokering?

A broker accepts a load from a shipper and, without informing them, passes it to another broker, who then gives it to a carrier. The shipper believes the original broker is handling the load, but they’ve lost control of who’s actually moving it.

2. How do I report double brokering?

You can report suspected double brokering to the FMCSA by filing a complaint through their National Consumer Complaint Database (NCCDB). You should also notify the shipper, load board, and your surety bond provider.

3. What is co-brokering insurance?

Co-brokering insurance isn’t a standalone policy. It refers to ensuring both brokers involved in a legal co-broker agreement have active broker bonds, cargo insurance, and general liability coverage to protect all parties and the shipment.

Final Thoughts

Double brokering and co-brokering may sound similar, but only one is a legitimate tool for growing your freight business. The other is a legal risk that’s not worth taking.

As a new broker, your success depends on doing things right, which involves building trust, being transparent, and following the rules. Knowing how to spot the difference and avoid bad practices can protect your clients, your carriers, and your reputation in the logistics industry.