How Unlawful Brokering Impacts Food Safety and the Supply Chain

Many factors such as crop failures or climate issues are outside of anyone's control, but there is one issue within our control and it impacts everyone from the farmer down to the consumer, and that is unlawful re-brokering of freight.

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If you walk down any aisle of a grocery store, you will notice that the prices for pretty much everything has gone up, and everyone from the manufacturers to the consumers are suffering because of it. There are factors driving up food prices that are outside anyone’s control, such as climate issues and crop failures. Yet there is one issue within our control and it impacts everyone from the farmer down to the consumer, and that is unlawful re-brokering of freight.

Lawful brokering is when a manufacturer or producer hires a legal, authorized broker to facilitate the delivery of their product. This broker will not only have gained a license from the Federal Motor Carrier Safety Administration (FMCSA) but will also have met legal requirements for insurance. That broker then selects a carrier to physically haul the products and deliver the freight. This legal process is used to transport items from farm to store, ensuring everything from mangoes to milk gets safely into customers’ shopping carts. This entire process is turned upside down when unlawful re-brokering, or double brokering, comes into play. 

Instead of dealing with one legal and qualified carrier to take the products from farm to store, double brokering places these products in the hands of many carriers, who are usually not authorized or insured to carry freight. This can happen when a broker hires a carrier that appears to be qualified to haul the freight. That carrier then re-contracts with a second carrier. This same pattern often repeats 4-5 more times before the freight is actually delivered. This slows down the supply chain by creating severe freight delivery delays. 

Unlawful re-brokering puts not only entities across the supply chain at greater risk of financial and legal harm, but it’s also a serious threat to consumers, too. When a product has been double-brokered, the chain of custody gets broken, creating a situation where it’s impossible to ensure goods have been transported at the correct temperature and away from harmful contaminants. This poses a serious risk for consumers’ health and safety.

In today’s world, when an individual makes an online purchase, they can track their package from fulfillment to delivery. There is clarity, transparency and trust in the process. These same principles should apply to the way goods make their way from growers, producers and manufacturers to supermarket shelves.

The solution? Education, technology and enforcement.

Unlawful re-brokering has long been and will continue to be an issue, but many brokers or carriers may not realize what they’re walking into. Fraudulent carriers can emerge suddenly and seem legitimate, even obtaining temporary FMCSA authorization for a period of 30 days then go dark and re-emerge under a different name. These entities typically operate abroad, putting them outside the jurisdiction of U.S. authorities. It’s important to have open lines of communication with carriers and vet any new partners. Look for red flags like missing insurance certificates, carriers operating through a P.O. Box, multiple recent address changes and refusal to use tracking apps or provide cell phone numbers. 

If you find yourself involved in a double brokering situation, it’s important to contact the FMCSA and the Transportation Intermediaries Association so they can add it to their watchdog reporting system. Leveraging information sharing and reporting platforms can help brokers better vet legal carriers and avoid illegitimate ones. 

Lastly, enforcement is needed. The MAP-21 2012 Surface Reauthorization Bill included an Unlawful Brokerage Activities Section that clearly established requirements for FMCSA authority, including a $75,000 bond or trust, to legally arrange for transportation of freight. Yet, more than 10 years later, FMCSA hasn’t arbitrated a single case of illegal re-brokering. If there is a law in place but no one enforces it, it renders it useless. Congressional action needs to be taken to combat this illegal process by appropriating funds to FMCSA to enforce the federal law.

Double brokering doesn’t just affect one party it impacts the entirety of the supply chain. The goods provided by growers, producers and manufacturers get compromised. Brokers and carriers are deceived and open to legal and financial threats. Finally, consumers are left vulnerable to food safety risks. It’s time for better awareness and education, investments in better information and technology platforms and greater enforcement of the existing laws to fight back against unlawful re-brokering.