In a perfect world, a freight broker's job is simple: to connect customer shipments with quality carriers that can move them.
But transportation logistics can get complicated. In some cases, a broker may need to work together with one or more other brokerages to execute a shipment.
This practice is commonly referred to as co-brokering, and it's a normal, above-board occurrence for many experienced brokerages.
But co-brokering is often confused with double brokering — an unethical business practice that, at best, muddies visibility and accountability. At worst, it can be downright illegal.
Since 1989, ATS Logistics has brokered freight for customers across the U.S. We're no strangers to co-brokering when a customer's situation calls for it — and we've helped many a shipper pick up the pieces after being burned by double-brokering elsewhere.
In this article, we’ll explain the difference between double and co-brokering, so you can better suss out unsavory brokers and protect your business from unethical providers.
Key Takeaways
- Co-brokering is a common, ethical practice when it is disclosed, consented to, and governed by clear contracts.
- Double brokering occurs without shipper knowledge or approval, and creates serious financial and legal risk.
- Transparency and accountability are the clearest indicators of a reputable freight brokerage.
- Strong carrier vetting and documented processes help prevent double brokering before it happens.
- Asking the right questions up front protects your freight and your supply chain.
What Is Co-Brokering?
Co-brokering occurs when one freight broker needs to leverage the capabilities of another to successfully execute a shipment. At its most successful, co-brokering can fill a gap in a transportation plan by aligning the expertise of two or more providers.
One example of a common co-brokering situation? Cross-border shipments.
A freight broker in the U.S. may be able to arrange transportation for a shipment across the country to the Canadian border. To get the shipment across the border into Canada and on route to its final destination, the U.S. broker may turn to another trusted broker with more experience within Canada for help executing this move.
This is a completely normal, ethical practice, provided the original broker's customer is aware of the arrangement and has consented to it.
Clean, thorough co-brokering contract agreements are key. Among other things, co-brokering contracts help both parties agree on:
- Carrier vetting qualifications
- Limits of liability
- Insurance requirements
- Payment terms
These agreements ultimately help keep all involved accountable and transparent throughout the co-brokering relationship and transportation process.
What Is Double Brokering?
Double brokering is when a freight broker passes a tendered shipment on to another broker without the knowledge or consent of the party that owns the cargo.
In many cases, double brokering occurs when the secondary broker falsely represents themselves as a carrier before accepting freight from the original brokerage. In this scenario, the original brokerage may not be aware of the deception — though the onus of properly vetting the "carrier" in the first place is still on them.
Double brokering is an unethical practice, one that the transportation industry at large looks down on. Double brokering is essentially a breach of contract between parties, which is bad business for brokers and shippers alike.
While double brokering is not necessarily illegal in every case, it can be. If double brokering results in a carrier not receiving payment for its work — either as a result of malicious intent on the secondary broker’s part or otherwise — it become criminal.
Unfortunately, double brokering shifts risk onto shippers. Unethical intermediaries often get off scot free while unwitting shippers (and their balance sheets) are left with a mess on their hands.
The True Cost of Double Brokering
Shippers who unknowingly have their freight double brokered can quickly find themselves in a bad situation through no fault of their own. Shipper victims of double brokering can face:
- Financial risks and losses
- Legal and contractual exposure
- Insurance and claims complications
- Reputational and operational fallout
Financial Risks & Losses
When a load is double brokered, the carrier that actually moved the freight may never be paid by the intermediary broker, which can trigger liens, cargo holds, or retroactive payment demands aimed at the shipper.
In some cases, shippers may be forced to pay twice for the same move just to recover freight or keep operations running.
Add in delayed deliveries, missed customer commitments, and administrative resources spent untangling the situation, and the true cost of double brokering escalates quickly.
Legal & Contractual Exposure
Ifa broker tenders freight to another broker without consent, contractual protections around liability, insurance, and service levels may no longer apply as intended.
This can leave shippers exposed in the event of cargo loss, damage, or theft, especially if the actual carrier was never properly vetted. Disputes can pull shippers into litigation they never agreed to be part of, simply because their freight was at the center of the transaction.
Insurance & Claims Complications
In the transportation industry, insurance coverage is built on clearly defined roles and disclosures. Double brokering muddies both.
Claims may be denied or delayed if insurers determine the move violated contract terms or involved misrepresentation. When responsibility is unclear, finger-pointing follows, and shippers can find themselves stuck between brokers, carriers, and insurers with no clean resolution.
Reputational & Operational Fallout
Beyond dollars and contracts, double brokering can damage shipper relationships with customers, downstream stakeholders, and the original broker.
Late or missing freight erodes trust, and repeated issues can raise red flags with compliance teams and auditors.
Even if the shipper did nothing wrong, their customers and stakeholders may not see a distinction, as the operational disruption can be significant.
The shipper is also unlikely to trust their original broker with a shipment again. If the brokerage knowingly double brokered their shipment, they've proven themselves to be unethical and unworthy of the shipper's business.
If the brokerage did not know they were engaging in double brokering, it reflects poorly on their carrier vetting processes and attention to detail. Either way, that shipper-broker relationship may be past repair.
How You Can Protect Your Supply Chain
Regardless of why or how it happens, double brokering is an ethically dubious practice at best and introduces unnecessary risk into supply chains. It should be avoided — and proactively guarded against — for the protection of your business.
To ensure your freight broker won’t double broker your freight, do your due diligence before tendering a load to them. Ask questions about their carrier vetting process, how the secure capacity, and their business, such as:
- How do they secure capacity?
- How do they vet their carriers?
- What steps do they take to avoid double brokering?
- What ongoing training do they receive?
- How long has this broker been operating?
- What kind of expertise/experience do they have?
- How many employees does this brokerage have?
A long tenure in the industry and a reputation for transparency, accountability, and good relationships are all green flags when it comes to vetting a brokerage.
On the other hand, red flags that a broker might be engaging in double brokering include:
- Vague or evasive answers about capacity
- Inconsistent carrier information (Look for changing carrier names, mismatched MC numbers, or last-minute substitutions without explanation)
- Unusual documentation issues (Think: rate confirmations, carrier agreements, or insurance certificates that arrive late, look altered, or don't match the carrier at pickup)
- Pressure to move quickly with minimal review
- Communication gaps during transit
- Payment or billing irregularities
- Limited operating history or thin staffing
None of these signs alone prove double brokering. But when multiple red flags appear, it’s worth pausing the conversation and asking harder questions before tendering freight.
Prioritize Transparency When Vetting Freight Brokers
Understanding the difference between co-brokering and double brokering is critical to reducing risk, protecting your freight, and safeguarding your bottom line.
Co-brokering, when disclosed and contractually sound, can expand a brokerage’s capabilities and help solve complex transportation challenges.
Double brokering, on the other hand, thrives on opacity and misrepresentation, eroding accountability and introducing avoidable exposure into your supply chain.
For shippers, the takeaway is simple: transparency is non-negotiable. Ask direct questions, expect clear answers, and work with brokerages that are willing to explain how your freight is handled at every step. A reputable broker will welcome that scrutiny.
When you know what ethical co-brokering looks like, you’re far better positioned to choose providers that operate with integrity and keep your freight moving without unwanted surprises.
