Episode Donovan

Caroline: [00:00:00] Welcome to this Weekend Trucking. My name is Caroline. In Q2 of 2023, freight Waves did a survey of carriers and brokers, and 85% of them said that they had been impacted by double brokering with nearly 56% of businesses experiencing losses of up to $50,000 and 30% seeing losses of more than $50,000, some who reported losses of half a million or more.

Caroline: This is a huge problem in our industry, and double brokering is only part of the rampant fraud that happens in trucking. So I wanted to bring on someone who knows a lot about this and deals with this every day and helps bobtail customers to avoid it. Donovan Reed, red Team Manager at Bobtail. Thanks for joining us, Donovan.

Donovan: Hey Caroline, thanks for having me.

Caroline: So tell me what is double brokering? First of all.

Donovan: A person with a carrier mc will book a load with a known broker. They will then turn around and sell you the load in hopes that you make the [00:01:00] delivery, but the payment goes to the scammer. They will find these loads on the load board. Then they will turn around, post these loads on the load board, whether that being by hacking the brokers, the at load board, or by having a brokerage mc just there for the sole purpose of double brokering freight. And that’s why it’s very important that we vet the brokers that come into Bobtails system because I know you rely on us to show you that, Hey, yes, I can work with this broker. I will get paid. There’s no funding business on the back end.

Caroline: So walk me through that process. First of all, someone goes. Gets a load somehow from a broker. Either they’ve hacked into their account or they’ve appeared to be a legitimate carrier to them. Maybe they are a legitimate carrier with the F-M-C-S-A. They book that load and then they are illegally re brokering that load to another carrier.

Caroline: The original broker doesn’t know anything about it, and they’re re brokering this load and finding another carrier to deliver it. [00:02:00] Once that carrier delivers it though, doesn’t it say that which carrier delivered the load? Like how does that even happen that another carrier could deliver a load that’s not theirs?

Donovan: Yeah. See that’s part of the issue here. This is shipper and receiver included, right? We all know that they’re there for unloading and loading a truck. It’s not their job to care too much about what goes on in the backend. Hey,

Donovan: you go up there, you give ’em a pickup number, alright, cool, go ahead back in the door, whatever you back in, you get loaded, you pull off, they give you the bools. And yeah, that’s where you can learn as a carrier. Look at the information that you’re provided. Look at the POD. A lot of the times it will have a different broker’s information and or a different carrier’s name on it. So as a carrier, you can look at that POD that you’re provided and you can see if I got this load from Bob’s brokerage, why is it telling me it belongs to TQL? Or why is there a different deliverying carrier listed on this POD? When that happens, that’s where you just need to take a step back.

Caroline: So if I’m the carrier that actually delivered the [00:03:00] load, and I, have the paperwork to prove it, if I don’t know that it’s a double brokered load, I’m just gonna send on that paperwork to whoever I think is the broker, right?

Caroline: And then what happens?

Donovan: so they will turn around and they’ll contact the real broker that they booked the freight with. Here, look, I delivered your load. Here’s the signed POD.

Caroline: Right?

Donovan: And they’re like, could you please QuickPay me? That’s the thing. They work with brokers that QuickPay because they know a lot of carriers, are forced to have factoring companies. So that invoice cycle, once it gets approved by your factor, it’s gonna sit there for 25, 30 days. Sometimes they don’t even look at the paperwork until 25, 30 days in. And that’s when they realized hey bobtail, this isn’t our load. It might say total quality logistics, or it might say CH Robinson. But if you look further into it, the contact information doesn’t belong to CH Robinson. The email doesn’t match the email domain. The phone number is not a phone number associated with the brokerage. The actual brokerage. When you see a load on a load board, you would feel like there’s no way that [00:04:00] this is fake or this could be fraudulent because of where you’re finding it. But unfortunately these scammers are clever. They have figured

Donovan: out how to post loads as brokerages that they have zero affiliation with. And that’s also why it’s important for you to, know your market trends, know where you’re at, know how much you’re expected to get paid per mile, leaving a certain area. ’cause what these scammers do is, yes, they’ll book a load with an actual broker. They’re not gonna spend much time haggling. They’ll book the load for cheap because they know

Donovan: they’re

Caroline: they don’t actually have to haul it.

Donovan: They just know they’re playing middleman. They just have to forward paperwork back and forth. And then they will have, then they’ll get the money for it. So they’ll book the load for, I would say, less than what it’s really worth. The broker will feel like, oh, I gotta win because now I’m moving this load for 200 bucks cheaper than I normally do. But they will tell you they’ll pay you. Way more money than what you’ve ever gotten out of that certain area. And it’s important to pick up on, verbal cues and to just really listen to the person that you’ll, you’re dealing with, right? Because again, you don’t know any of the brokers you work with personally. You [00:05:00] might, but it’s very, it doesn’t happen. These guys do the same thing all day long. They have these conversations.

Donovan: They know what to say to you to make you believe that they’re a legit broker because they’ve, they’ve probably been on the other end of it. So I would say listen to what you’re being told. If you get an email from a broker, look at the email. Where’d the email come from? Look at the email domain. Make sure that you see, and that you know that, okay, this person does actually work for CH Robinson, Lance Star. They do target these bigger brokerages because they do offer quick pay

Donovan: And that’s the main part of their scheme is they need to get quick paid because once that load, a double brokerage load reaches bobtail, our employees are trained to look at these rate cons and to look at all that information. Does the load number fall into the sequence of all the other loads that we’ve been approving? Load brokers stick to the same thing. They’ll start with load 1, 2, 2, 2, 1, 2, 2, 3, 1, 2, 2, 4. But here comes a load that’s nine digits long completely out of the norm for this [00:06:00] broker.

Donovan: Our teams are trained to pay attention to that, look at it look for edited rate confirmations because obviously they’ve gotten the real rate confirmation they have it, but if they’re trying to dupe you, they can edit it to say whatever they needed to say to make it seem legit for you.

Caroline: Tell me a little bit about your background. I know you did dispatching for a while. You’ve been in this industry for a while, and then tell me what you do at Bobtail. What is the Red team?

Donovan: Yeah. Dealt with brokers, booked loads. Ran a 22 truck operation.

Caroline: I.

Donovan: Did everything from booking loads, finding drivers, insurance, everything that goes into running a trucking company. Luckily during that time, disting wasn’t where it’s at today, so it was very rare that somebody was trying to do this, but it was happening just on a lot smaller scale. The thing is, the word has spread, right? Hey, if you do this, if you have the knowhow, if you’re able to swindle people out of thousands, hundreds, and thousands of dollars, and now with for Bobtail, I work for the Red Team Reserves and enhanced due diligence if a carrier gets caught [00:07:00] hauling a double broker or if a carrier hauls a double broker load and submits it to Bobtail. And our team, our processing team spots it, it’s our job to then look at the paperwork, use the queues on that paperwork to try and find the real broker. ‘ cause most of the time there are queues, right? It’ll tell you this load belongs to Spot Freight. This load belongs to Molo, whichever the case may be. So we then reach out to the real brokers. We inform them, Hey, just to let you know, whichever carrier you booked on load 1, 2, 3, they didn’t haul it. Our client did. And the reason I know that is because I have the POD and our client submitted it to us. We vet our clients. I know you are out there hauling real freight. So we then contact the real broker. Our first goal is to get payment placed on hold. Hey, do not pay whoever you have booked on this load because they didn’t haul it and they might not even pay the real carrier. ‘ cause there’s, there’s two different ways that they do this. They will book the loads with the real brokers and sell it to you for a couple hundred bucks cheaper that way that they make some money,

Donovan: Right,

Caroline: But they’re still gonna pay you, [00:08:00] but they’re paying you a pittance.

Donovan: Yeah. Yep. They’re paying you, they’re taking their cut of the load for doing nothing. And that’s also bad because it drives down market rates. Then these brokers, they catch onto it and it affects not just that load that you’re on, but it has an impact on the market. Especially if these loads keep on getting recycled, the rate gets lower and lower. As these things are kept. They keep that of all this, that’s how they come up with the, hey, this is your rate per mile that you’re gonna make out of this area, or an estimate at least. So it impacts that part of the business as well. But the main thing that we’re worried about is there is no guarantee that this guy’s gonna pay you. It’s very obvious when we contact these brokers and we’re like, Hey, this load was double brokered. What did you offer this guy? Oh, I offered him $1,200, but they offered our client $3,000. Just so that you get on that load. So at the red team my team calls these brokers. Sometimes we have to call shippers and receivers to try and get this information because it’s not always listed on these pods. We investigate, we try and get, determine [00:09:00] who the real broker is, get that payment placed on hold, let them know Hey, this is who haul the freight. If you’re not set up with them, do your vetting, do what you do normally, but they’re gonna have to get your company set up so that they can provide you a rate confirmation from the actual product owner.

Caroline: I wanna circle back a little bit and explain these two different scenarios of double brokering because I think that can be confusing to people and it seems a little counterintuitive because we, on the one hand, we say, if you see a rate that looks way too good to be true, that’s probably double brokered.

Caroline: But also, if you see a rate that’s way too low. That also might be because it’s double brokered and it might seem really counterintuitive, but here’s what can happen. If it’s too good to be true, then they have no intention of actually paying you. So the reason that they can post it at such a high rate is because they’re not actually gonna pay you that money.

Caroline: They’re gonna take the actual rate from whoever they actually booked it as. And then if it’s way too low, then they might have the, in all the intention of paying you that really low rate, but they have illegally double brokered it to you to [00:10:00] make a couple hundred bucks on that one load. And they might do that a lot more.

Caroline: And so one is obvious, a really obvious scam to the carrier, but the other might not seem like a scam because you might just think everything is by the book. It’s not re brokering freight is totally unheard of in trucking, right? The big brokers do it between themselves and that’s.

Caroline: By the book. So you could think that this is just a normal practice in the industry. And so I just wanted to call out those two scenarios because it might sound like we’re contradicting ourselves, but really it’s if you see a rate that’s really unusual, be it much higher than the average or much lower than the average, chances are that it could be double broker and you need to do more due diligence.

Donovan: Yeah, no. It’s important that you do highlight the two differences because with the, with scenario A, when they’re offering you way too much money those normally happen on hoo rate con takeover situations, meaning that the person you’re dealing with, [00:11:00] he is gonna tell you he works with a reputable broker, but in all reality, he doesn’t. And we know great confirmations are easy to get because you call a broker, you book a real load, now you have this template of what it’s supposed to look like. Then you can just go and they edit the information out to match it so that you don’t contact the real person, the real brokerage. You deal with them thinking, this is my broker. I’m gonna text him my pods once I get done with this load. And that’s their main goal. They wanna make sure that paperwork comes to them and them only so that they can turn around and contact these real brokers to get paid with the second scenario. These are legit brokerage MCs, it’s, money that they spent to build this brokerage, build this company, pay for all, everything that you need to pay for to have a real brokerage. So when you look them up on F-M-C-S-A,

Caroline: They look legit.

Donovan: legit. Oh yeah. This company, I said, they’ll be on F-M-C-S-A, they’ll have bonds they’ll have surety bonds. They might even have websites. So they’re like, it’s a real entity. This is a real brokerage. You can find them, you can information about them. But the thing that [00:12:00] happens with those, they will do this, they’ll make payments, especially if they’re, if they slip through a factoring company. ’cause again, the real broker’s information or oth other carrier information is not always listed on these pods, right? So first little comes, okay, hey, this broker’s been in business for two years. Hey, they got good credit. But that’s their, that’s the goal, right? They wanna build good credit. They wanna look like they’re a reputable company because we see this happen way too often. Yes, they’ve paid in the past, but hey, good luck getting paid on these next two months worth of freight. Because they know, Hey, look at this bankroll that I can build by not sending out a single dollar. All the real brokers are paying them, even though, they were supposed to pay you $200 less than what they made. They’ll build this bankroll and then all of a sudden you’ll realize this surety bond is canceling. Then they make all these carriers fight over $75,000 by making us filing bond for them not paying the invoices, and then they just restart it again with a different brokerage mc, because unfortunately, again, F-M-C-S-A when they get paperwork for applications and stuff, [00:13:00] these gamers get through ‘ cause they’re smart, they know what they need to be able to create a legit broker.

Caroline: So how could I. Even start to identify one of those situations. The one thing is that they’re just pretending to be a broker that they’re not, but in the other sense, they look like a legitimate broker. I can look them up on F-M-C-S-A , how would I know if they’re double brokering a load to me

Donovan: That’s why it’s important, to look at the paperwork, teach your drivers, because for a lot of people who will probably watch this, they don’t deliver every single look. They have drivers who work for them, they have other trucks for them, but go over this for your drivers and be like, Hey, once you pick up a load, just look at it because there will be hints on the paperwork.

Donovan: I would

Donovan: love to

Caroline: on the POD? They receive the POD.

Donovan: on the POD, you pull up through shipper, you get loaded, they give you your product they give you your paperwork. Have them look at it, have them really. Look at it, not just, oh, I got it. Sit it down. I’ll pull this out in two days when I make my delivery. Inspect it.

Donovan: [00:14:00] Pryor, you can even ask them, Hey, send it to you if you’re their dispatcher. Or if you’re the owner of company, Hey, send me that paperwork. Lemme look at it. Or if you factor with bobtail, you can be like, Hey Bobtail, does this look good? Is everything here? This is from a real broker.

Donovan: Do you guys work with this broker? That’s why it’s also important, don’t just book a loan, whoever you factor with, check to make sure that your factor does work with this brokerage. ‘ cause that means there is some sort of history with the broker. That means, credit has been checked. But like I told you earlier,

Caroline: They can still slip through, so you still have to look and what am I looking for on the paperwork? Like you say, look at the paperwork. But what specifically am I looking for?

Donovan: But look for the name of the delivery and carrier. If it’s somebody I. That’s not your company. Pause. Big pause. ‘ cause as we all know the pods bools, that’s your money. That is literally like cash in your hands. So if it’s telling you that a different trucking company delivered this or picked this up and delivered it, or is going to deliver it, ’cause you just picked it up, pause. Like why would it say that when I know my companies pick it up and this is where it cause issues on the backend as well when filing bonds, the [00:15:00] bond companies will be like, huh, how do I know you hauled this when it’s

Donovan: telling me a

Caroline: You weren’t even listed on the POD. What evidence do you have?

Donovan: correct. So look at the paperwork, look for hints on there. It’s very seldom where one of these major brokerages will have a co brokering agreement with a smaller company, right? Because I. It’s, they’re gonna have better luck finding trucks than the smaller brokerage, because they have a way bigger network, right? So they’re not gonna outsource these

Donovan: smaller, or not even small loads.

Donovan: They’re not gonna outsource loads to different brokerages when they know they’re not gonna make any money off it. They’re just

Donovan: gonna find a themselves,

Caroline: Robinson makes more than more sense than TQL and

Donovan: right?

Caroline: X

Donovan: Yep. Yeah, and ,

Donovan: that’s part of the hints that you can look for and what our team’s trained for, right? And also use F-M-C-S-A. Definitely. If it’s something, somebody you’ve never dealt with, pull up F-M-C-S-A, type in that mc number, DOT number. Look at the phone number that is listed there. Call that number because if you call that number, [00:16:00] you know you’re gonna be dealing with someone direct, right? And also look at authority date. You’re not gonna start a brand new brokerage today and have a massive list of customers, right? It just doesn’t happen. You’re not gonna have authority for three months, but now all of a sudden you’re moving, say, Nestle loads or mail loads, or, frozen produce from these big, frozen from the produce companies. You, it just, it, it just doesn’t work like that, right? Those loads go to the established brokers and if you find ’em on a load board, check authority date, see how long they’ve been in business for, do a quick Google review because a lot of the times this catches on, right? These companies. They don’t do this forever with one mc because you do get, they do get caught.

Caroline: Right.

Donovan: surety bond does cancel, and then the thing is they just start back over again. So unfortunately, this thing is not gonna just go away. It’s up to us and you as a carrier to catch on to really look at the information that you’re provided, listen to who you’re speaking with. These scammers, they will, they’ll get very pushy with you. I know [00:17:00] regular brokers do as well, but they’ll be on you. Hey, send me that paperwork. Send me that paperwork, send me that paperwork. Hey, you there yet? Hey, you there yet? Because they’re trying to claim that, hey, I’m currently on that load.

Donovan: I’m driving that load. So they need constant updates from you, right? That way they can relay it to the real broker. Okay? I’ll be there in five minutes. I’ll be there in five minutes. Like I said, I get it. Real brokers do this as well, but. Just listen.

Caroline: it’s all of these signs building up. Like number one red flag, your carrier’s name is not on the POD.

Donovan: yep.

Caroline: That should be, that’s a non-starter. It’s gotta be

Donovan: Right now it, that’s immediately where you stop,

Caroline: immediately non-starter. So what, there are different signs when you’re booking the load versus once you book a load and you’re picking it up. So let’s start with when you’re picking up the load, you get the POD, your carrier name should be on it. Your MC number should be on it.

Donovan: Yep.

Caroline: It should be a total non-starter if it’s not.

Donovan: Correct. And also if you’re dealing with somebody and he tells you, Hey, man, when you go check in there, [00:18:00] tell ’em you’re with this trucking company, because they do that.

Caroline: And for people who are new, they might not know that’s completely inappropriate and sketchy.

Donovan: Yep. ’cause that’s the thing again, right? They want to make it seem that they’re the ones moving this freight.

Donovan: So if you pull

Donovan: up to a shipper and you give them an MC number that’s not on your truck, I, that’s weird because you’re basically telling them, Hey, somebody else is moving this freight. Even though you’re the one who’s actually out there driving, spending your fuel money, you’re basically telling them, Hey, this company’s pulling up here. That’s why these brokers are also, they’re starting to really put the hammer down on this because they’re freight is in massive danger. A new thing that’s going around now is you’ll be booking a load with a rate con takeover situation broker. They’ll send you to the shipper to go get loaded.

Donovan: You’ll go get loaded, but instead of him sending you to the actual delivery address. He will send you to a random warehouse and he tells you, Hey man, go ahead. Unload it. There you’re done. Now that product never makes it to where it’s supposed to go, but guess who’s on camera at the shipper picking up this freight?

Caroline: [00:19:00] Wow. Okay, so that even goes beyond double brokering. Right now we’re just talking about freight theft

Donovan: Yeah.

Caroline: and somebody being tricked into being implicated in it.

Donovan: Because, and that’s why they do the rate con takeover situations. I would love to say that this is something that happens every once in a while, but it’s getting more and more rampant because, hey, you can make 900 bucks from the broker by sending a different carrier to go deliver this. But if that’s a valuable load, and you have friends who’s also out there committing scams, they send you to a private warehouse that they know. And then you are gonna be implicated. You’re like, Hey, you picked up this load.

Donovan: Why did you take it there? I’m like, Hey, sorry, look,

Donovan: here’s my rate confirmation. But then you look more details into the rate confirmation, random phone number, random Gmail, Yahoo. What we’re seeing pop up a lot now is emailed like at load confirmation at load docs.com. So they’re going through the effort to get domains, but obviously they can’t make a at Landstar domain.

Donovan: So they’re trying to [00:20:00] look more and more official by having domains at, not at Gmail, not at Yahoo, not at Outlook, not at the free domains that anybody can just go ahead and make an email. And it’s constant. We deal with many double brokerage loads daily, and it could be. rate con takeover or newer brokerages, our client hauls a load for a new broker.

Donovan: Hey, can we factor them? Load gets submitted, we review it before adding them, into our system. Obviously we check credit, we do this, we do that. The thing is, even if we can’t work with the broker due to authority, date, or bad credit, we still wanna help you If you hauled a bad load and, complaints need to get filed against these entities. If they’re legit brokerages, right? Or quote unquote legit, you have brokerage authority because they’re gonna continue to do this until that mc is driven into the ground and the surety bond cancels. So it’s important that as you’re on these load boards really pay attention to who you’re dealing with.

Donovan: If something sounds off. It probably is.

Caroline: So we talked about as you are delivering a load or as you’re [00:21:00] picking up a load when you’re already in it, which hopefully, it’s not gonna be too late by that point because at least, yeah, maybe you’ve gotten to the place where you’re gonna pick it up. But now you can look at the POD, you can see if anything is fishy on there.

Caroline: Once you’re gonna go and deliver it, maybe you get some weird, sketchy instruction at the last minute to drop it off at a different location. At that point, I would say, pull into a rest area. Try to figure this out. Call bobtail if you’re factoring with us. I can’t vouch for any other factoring companies.

Caroline: I don’t know if you would be able to call them and get help on the phone. Most other factoring companies have are pretty notorious for not answering the phone. But hopefully you can get in touch with somebody at the real brokerage or at the or maybe even just at the shipper Hey, are you expecting this?

Caroline: So don’t follow those sketchy instructions. Don’t let anyone convince you to represent yourself as a different company of somebody. You’re not. Let’s talk about backup a step, because that’s [00:22:00] the last line of defense is on the spot, figuring out that this is a sketchy load. What about booking loads on the load board?

Caroline: What are things that I can do to. We’re never gonna completely eliminate all risk, but what are some of the things that I can do to try to make sure that I’m not booking these sketchy loads to begin with?

Donovan: Yeah. Again, it’s looking at the details that’s provided on these load boards, because when you post the load or a broker post a load, there’s a phone number attached to it. There’s sometimes even an email attached to it. I know it’s tough out there because the good loads are very far in between. So these guys are using that as motivation, right? They’re gonna post this load for a buku money. They’re gonna just entice you to call let me look into it. Go ahead. If you have the time, call them, listen to what they have to say, but before you move, once they send you that rate confirmation, you at that point now, so we’re talking about rate con takeovers to be clear, right? So now [00:23:00] you have this rate confirmation, you

Caroline: you say, and when you say rate con takeover, what you’re talking about is someone pretending to be. A broker that they’re not, so they’re pretending to be Landstar. They’re pretending to be TQL and it’s not always a big brokerage either. Some might try to steal identities of smaller brokerages too.

Caroline: But they’re, when you say rate con takeover, they’re basically, they have a real rate con and they’re editing it and sending you something different.

Donovan: Yep. Correct. So they’re using that rate confirmation to basically to swindle you, to make you believe that, hey, you’re dealing with Landstar. Let’s just use Landstar. But that’s why once you get that rate con confirmation, look at it, right? Think back. Have I worked with Landstar before? Go ahead, compare the two. Look to see, especially if that rate confirmation came from a random email. By random email, I mean anything besides. The broker’s at Landstar, right? Compare that information to what you have. Easiest thing to do is also Google the broker [00:24:00] call the main number that you see for that company. Call that number.

Donovan: Be like, Hey, I’m calling about this load. Is this valid? They’ll be able to tell you, that’s not a load number of ours. Double check that. Oh, gimme that load number again, it’s not gonna match. Or what they do is they will use legit load numbers from these brokers, but it’ll be a load that delivered two years ago. So once you get that rate confirmation, look at where it came from, look at who sent you that information, that’s the most important thing, right? You’re not gonna get caught in a rate con takeover situation if you can vet that. That email came from a legit rep at this brokerage. That’s the first thing.

Donovan: Because then they can’t hide that. They’re not able to

Donovan: Send you an email from a broker that they don’t work with.

Caroline: right. So go on the Real Broker’s website, go on Safer, find the registered phone number and email for that brokerage if it’s not coming from the same domain. If the email you got with that Rate Con isn’t coming from the same domain that is registered with the FMCS, [00:25:00] a big red flag if you’re getting calls, texts, WhatsApp messages from a number that’s not a number listed on there.

Caroline: Now granted. If it’s a big brokerage, they might have multiple phone numbers, right? And it might, they might not all be listed on the website or all be listed on the FMCs a’s website, but if they don’t match any of the numbers that are listed, you can go and call the official number that you see online and just vet the information.

Donovan: Yes, that’s correct. Because you know these bigger brokers who get targeted by this, they have 24 hour dispatch, right? They have people who’s waiting for check calls all day, all night, call them, Hey, calling you about this load number. Is this valid? And they’re also at the point they will love you for providing them this information.

Donovan: Dang, where did you find this load? Oh, I found her on the load board, big red flag. That means that our system, our DAT got hacked. So they can also jump into steps to prevent that from happening again. But at the end of the day, focus on who you’re dealing with. Look at the emails, look at the phone numbers. [00:26:00] Call. Even Googled the phone numbers that. That are on these rate confirmations and it’ll come back like potential scam, it’ll come back something weird that has nothing to do with transport, right? So use the tools we have. We live in a great age where the internet can really help us, but they also know how to use the internet, right? They will also use the public information to manipulate any party they possibly can to get some money to scam somebody. And they do not care. Like I can tell you this right now, they, they could care less. Yes, you just drove from one side of the country to the other for $0, but guess what? They got $6,000 and calling them, getting mad at them. It might make you feel a little bit better, but at the end of the day, it’s not gonna get you your money back.

Caroline: So we’ve just talked through everything that we can do to avoid getting into one of these situations. Worst case scenario, I do everything possible that I can, or I just have a really low bandwidth day and I don’t do any of the things that we’ve just talked about, and [00:27:00] now I’ve delivered the load.

Donovan: What happens next? How might I find out that it was actually double brokered?

If you don’t have a factoring company, you’re more than likely gonna go and try and get QuickPay yourself, right? So you will ask the scammer that you’re dealing with, Hey, okay, I just delivered your load. Go ahead and QuickPay me. They’ll string you along for days and days. They’ll ask you to send banking information. They’ll ask you to send voided checks, but the money just won’t show up. That’s one thing they do when it comes to having a factoring company. They obviously, you just hauled this load. You’re gonna do what you do with all your other loads. Okay, I’m done. Got my POD signed. Go ahead, let’s get it uploaded. If you use bobtail you should check out our loads by bobtail on how to submit your rate cons easily and get p paperwork from drivers. I’m sure that’s on another video that Caroline can link you to, but as you submit that load to bobtail, it’ll come into our queue. We will then handle it like at every other load. We will do what we do to vet this paperwork, right? We will do what we can to confirm the validity of this load. [00:28:00] And if we catch that there are issues, we will inform you right away. Hey. This load that you hauled is a rate con takeover situation. The person that you’re dealing with does not work for the broker brokerage they claim to work with. Have you sent them paperwork? Yes. Ottoman. I’ve already sent them paperwork. Okay. Oh crap. Let me hang up this phone. I need to go ahead and use the cues on this POD to try and figure out who the real broker is. Sometimes it’s easy

Caroline: cause it’ll be just right on

Donovan: It’ll be right on there. So it’s quick call them, Hey, you guys had a load that moved from this location to this location.

Donovan: Sometimes the load number’s even on there, right? You give that load number to the broker and it’s oh, I have this carrier listed. I then at that point, tell them, okay, I can tell you without any doubt a hundred percent certainty that they did not deliver that load. Okay. The broker will tell you then, okay, they will try and gather their information, but first goal is. Please do not pay whoever you have listed as the carrier.

Caroline: Just pause, put a pause on it.

Donovan: Do not pay anybody. I tell them, go ahead. You can investigate this all you want. I [00:29:00] know you’re gonna come to the same conclusion that I did. Because if you call your customer, they’re gonna tell you who pulled up there and it’s not who you think it is

Donovan: And

Caroline: And there’s gonna be security footage of what truck pulled up.

Donovan: Yep. And like I always tell them, there’s one person in the world who has the hard copy of this signed POD. And again, that’s not who you think it is. It’s the person that I’m telling you it is. But really at that point, we don’t want you to get to that point.

Caroline: No, absolutely. But there might, there’s a lot of ifs here, right? if you sent us the paperwork immediately, that’s a big one. If you waited a couple days and it was double brokered and you didn’t know it, and we didn’t,

Donovan: We

Caroline: there’s not a, there’s not anything that any factoring company would be able to do at that point.

Donovan: Yeah, correct. Because yeah, no, these guys, they’re relying on you to deliver that load and send them the proof that load delivered immediately.

Donovan: Once you send ’em that paperwork, they’re not waiting a single second. They’re immediately turning around calling the real broker, telling them, Hey I just forwarded you to you the paperwork. Please go ahead and pay me. They’ll check it out really quickly and they’ll make the quick pay.

Donovan: Now when it’s too late, you submitted today or you submitted your [00:30:00] load six hours later or the next day.

Donovan: Now we see it. We reached a broker again. That’s the first thing we ask. Have you paid them yet? Yeah, sorry, Donovan. We’ve paid the broker. We’ve paid the carrier who claimed who booked this. Then we have to turn around and call our carrier and be like, Hey, I’m sorry, but I. The person you dealt with was a scammer. We spoke about this, we informed you that there’s a possibility that you hauled a double brokered load or a rate con takeover load.

Donovan: Same thing. But then at that point we have to let you know, sorry, you’re not gonna get paid. A lot of carriers said, oh, I’m gonna call the real broker. I’m gonna call the real broker. You can call them, they

Donovan: don’t have obligations to double pay freight. They’ll pay that load one time and that’s it. They’re not gonna be like, oh, I feel sorry that you got caught up in this situation. I’ll send you payment as well. Unfortunately, that

Donovan: doesn’t happen.

Caroline: right. They’re not gonna pay twice for the same load.

Donovan: And this is why it’s also important to look at paper, even if it’s not rate con takeover, when we’re talking about these newer brokerages with the new authority. ‘ cause at the end of the day, they’re promising you X amount of money. They’re getting paid more for it, right? Just for sitting there. And using, being [00:31:00] the middleman for this, they don’t deserve that. You deserve every single dollar that broker is paying out for that freight because you are the one who’s

Donovan: paying for fuel.

Donovan: You’re not getting a fuel discount. Time doesn’t move a little bit slower because you’re hauling this load. No, you’re still deal, you’re still doing your day to day and you deserve to get paid the full amount of that freight. And if the broker who’s double brokering this freight, with the legit mc, yeah, you got the load. But the thing is, you are just as likely to be able to find a load from that same broker they got it from than they are because again, they’re using a registered carrier mc to even get this freight in the beginning. And that’s why we keep mentioning, look at the paperwork. Because that paperwork will say, Hey, this is the carrier you booked, or that the shipper’s expecting to pull up there. That carrier’s name will be listed there, so don’t scratch it out and put your name. Don’t try and cover it up, because that just creates more issues, right? Hey, why is this covered up? Why? Why? Because these brokers, the legit ones, they are now, they’re scared because their freight’s getting [00:32:00] stolen, like full load.

Donovan: It’s just disappearing off the face of the earth. And then you are gonna be implicated because you are the one who pulled up their and delivered it. Pulled up there, picked it up, and then took it to wherever you were instructed to.

Caroline: Even if you don’t get some sketchy instruction of where to leave it, if they find out that a different carrier picked up the load, they don’t know what’s going on. Now you look like

Donovan: Yep.

Caroline: This is a really I know this is something that we’ve been talking about for a couple of years.

Caroline: We actually have a couple of, events that we did around double brokering and what to do if you get caught up in a situation like this. Number one line of defense is prevention. Just prevent it from happening altogether in, we’re, we keep going through the cycle. In the worst case scenario, they’ve already paid the scammer and everything.

Caroline: Is there any recourse for the carrier after that? Okay, the broker’s not gonna pay you. Is it possible to get it from the shipper? Is there a possibility to file on the bond that broker has and make your case? What kind of options do I have?

Donovan: Yeah. So when it comes to rate con [00:33:00] takeover where it’s just scam from the beginning. You didn’t get the load from an actual brokerage. This is a person pretending to work for them. You can try and go after the shipper, these shippers, unfortunately, they’re there to move product, right? You can try and escalate it, you can let them know. The thing is, once it gets to that point, and that shipper is now involved, now the broker, that they actually gave this to. Think about the light that shine shines on them.

Donovan: Hey man, you told me this guy was pulling up here. He didn’t, now somebody else is coming to me for payment. So they don’t necessarily like to have that conversations with clients, carriers, factoring companies.

Donovan: We do use Backer and Bailey to go after shippers in this case ‘ cause they at least have some power behind them.

Donovan: Unfortunately for us, we can provide the facts all we want. Unfortunately at that point they, they will stick to what they know, right?

Caroline: The whole reason that they’ve gone through a broker is so that they don’t have to worry about the logistics of getting their freight. That’s the whole point. Yeah.

Donovan: And you, we can get lucky, and we have gotten lucky, but at that point we’re relying on luck to get you paid for the freight that you [00:34:00] moved. And nobody in this business is in it for luck. Like we need to

Donovan: know for certain. We try, if it’s a brokerage who has a mc, yeah.

Donovan: We file on the bond. But this is where it becomes that issue. We talked about the paperwork. The bond company tells you it tells me that a different carrier halt is your claim has been denied. Or they have 3, 4, 5, 6, $700,000 worth of loads that they

Donovan: didn’t pay out. Now they’re making you fight over $75,000. You’re getting pennies on your dollar if you’re even getting anything. And with all the laws and everything regarding the surety bonds, a lot of these things are exempt from the beginning. Like poultry, if it’s a chicken load, the bonds not gonna pay you ‘ cause chicken is exempt. If it didn’t leave the state of where you picked up in, it’s exempt. So if you get caught hauling for one of these brokers who have, has a legit authority and you’re doing multiple loads, and they’re all within the state, and now you realize, oh, there’s a problem. They haven’t paid me or my factoring company. Now you just spent a month of your time, a month of your fuel to haul these [00:35:00] freights in the city or in the state that you’re in didn’t leave.

Donovan: So now all of that’s gonna be exempt, didn’t again. They know it. These, the scam, they’re not stupid, right? They know what to do, they know what kind of freight to go after. That’s why when they call the brokers, they’re like, Hey, what kind of freight they know this will be exempt from the bond. Or, Hey, this will actually go on the bond. So they’ll say, oh no, thank you, and they’ll move on to the next one.

Caroline: Oh wow.

Donovan: Yeah. No it’s interesting and it’s very frustrating because I do see our clients losing money daily.

Caroline: Right.

Donovan: when these loads come in our system and we can tell from the beginning it’s been double brokered or rate con takeover situation. We just have to again then jump into action. Hope and pray we will quick enough. So that’s when it comes down to luck. So the way to totally prevent that is to really look at all the information that you get from this broker, from the time he sends you that rate confirmation via email. That’s where it starts for you. So we need to look into the email domain, where to come from.

Donovan: Think about the rate. Now, when you pull up to the [00:36:00] shipper, look at the paperwork that you provided after you’re loaded. If they tell you, oh, this is a blind shipment. Tell ’em you’re doing this. Tell ’em this, that, or the other. Don’t, just don’t. That’s a big one that they’re using. They’re telling clients, oh, this is a blind

Donovan: shipment. Tell ’em this.

Caroline: Yeah. And so explain what a blind shipment actually is so people don’t get tricked by that.

Donovan: A blind shipment is when the brokers are trying to save money. At the end of the day, they, and they don’t want people knowing where the product came from. So the product will actually come from two towns over. But the POD will tell you it came from nine towns over.

Caroline: Right

Donovan: they’re trying to hide where this freight actually came from, and

Caroline: but they’re trying to hide that from the receiver.

Donovan: Yes. Not from

Caroline: It doesn’t have anything to do with you, it doesn’t have anything to do with the carrier. The carrier has to know where it’s coming from and where it’s going. Otherwise, how is he gonna pick it up and take it there? So having it be a blind shipment doesn’t have anything to do with the carrier.

Donovan: Nope.

Caroline: It’s turned into this buzzword that people will use to. Trick somebody into [00:37:00] oh, okay yeah, that makes sense. And especially if somebody has a really convincing, compelling personality that, that can convince you like, oh, it’s a blind shipment so it’s fine.

Caroline: You, you can just tell them that you’re from X, Y, Z trucking company. And you might think oh, okay, that makes sense if you’re, if you don’t actually know what blind shipment is.

Donovan: Yeah. And that’s, that comes back down to just again, vetting who you’re working with, looking at the information you provided, because they will tell you whatever you need to hear

Caroline: To convince you to do it.

Donovan: yet to convince you so that they can get the money from for your hard work. They’ll tell you, oh, check in as this carrier, give them this pick pickup number. But never ever claim to be a carrier that you are not, because that is only gonna end bad for you.

Donovan: Hopefully not. But again, that’s what we come down to. Luck, right? It’s gonna be luck if we can get you fully compensated. And again, right with these, the legit brokerages. Or the rate con takeover situations.

Donovan: You might get caught on this load. We might be able to stop it, but you were anticipating making $3,000 save for this load. But now, two days later, we figured [00:38:00] it out. Okay, broker put payment on hold. Here’s $1,100 that we offered the first carrier.

Donovan: ‘ cause they have no obligation to pay you what you and this third party scammer agreed upon.

Donovan: They will pay you only what they agreed to pay the booking carrier. And again, we spoke earlier and we said they’re not out there really haggling too much. They will take

Donovan: what they can get because they’re

Caroline: If they don’t, if they don’t have any if they don’t have any intention of paying you in the first place, they’ll tell you whatever rate you wanna hear.

Donovan: Yep. And they’ll take whatever they can from the broker. They’re not gonna do anything to make that broker not load, quote unquote their truck.

Caroline: All right. Let’s talk about a couple of other scams that we’ve seen crop up recently. Double brokering is a huge one. rate con takeovers is a huge one. Freight theft we’ve talked about. But something that I that I know started to happen and started to get gain more traction last year.

Caroline: It was probably always happening, but started to gain a lot more traction last year, was selling your MC number to somebody. So people will get offers by email or phone call [00:39:00] and say, Hey, I saw you have, x, y, Z trucking business. Looks like you guys have been in business for a couple of years.

Caroline: Looks like you’re doing pretty well. I saw a picture of your. Trucks on LinkedIn or whatever. And we’d love to be able to book some loads using your mc. Hey, we’ll give you $10,000 just to use your mc to book some freight. Donovan, tell me what is wrong with this picture.

Donovan: Everything. So like you said, you will get random calls out of middle of nowhere. Hey, I noticed that you have this mc and then they’ll offer you straight up cash.

Donovan: They’ll offer you a bunch of money, right? So it’s gonna sound good. Hey, let me buy your MC number, or, Hey, I’ll send you this money to let me book some loads under your MC number, and then you submit that to your factoring company and then your factoring company pays you.

Donovan: But then you turn around and pay me. Do not fall for any of this. Buy your mc, or Hey, let me book a load using your MC number. All of it is fraud. I’ll even [00:40:00] go to Faray. Immediately hang up the phone,

Donovan: tell them do not call you again, because their main intention is, and what they’re doing is they’re, you’re telling them, okay, cool.

Donovan: You give them permission to go ahead and use your MC number to book loads. They’ll book that load. But then on the back end, that load that they booked, your using your MC number,

Donovan: they’ll rate con take over it to a different carrier who they will then in turn have pick up that freight somewhere, take it to his buddy’s warehouse, gets unloaded, freight’s gone. Your MC is liable because you book that load. Don’t sell your MC number.

Caroline: You can sell a trucking business with its MC number. That is something you can do. But there is a whole a whole process in place to officially transfer the ownership of an MC number to someone else

Donovan: Correct. Yeah.

Caroline: if they are not willing to go through that entire process before you give them access to anything.

Caroline: It’s a scam.

Donovan: Yes.

Caroline: a legitimate offer.

Donovan: yeah. Don’t sell your MC number to a random guy just calling you like under the table Hey,

Donovan: [00:41:00] I’ll do this. You keep the company name, you just give me the information. Don’t do it because they’re using your MC number to commit fraud, and it will a hundred percent come back to you. And also what they’re doing is they’re calling carriers and be like, Hey, notice your mc. Everything looks good because this is public knowledge, right?

Donovan: Your MC number,

Caroline: Your safety score.

Donovan: your safety score, everything, it’s public knowledge. So they will target the good carriers. They will call you and be like, Hey, I have friends who’s hauling freight, but they can’t submit it.

Donovan: They can’t get a factoring company. Blah, blah, blah, whatever the case may be. I have trucks. I need to move some freight. Can I use your mc number? You book the loads or I’ll book the loads. Once we complete it, we will send you the paperwork. You submit it, you get paid. You keep a little chunk of it, you send me the rest.

Caroline: Now a lot of this is starting to sound like. Leasing onto an authority, which is a legitimate business relationship.

Donovan: Yep.

Caroline: But if it’s, but only if it’s legitimized

Donovan: Correct.

Caroline: By a lease agreement, you have to, okay. Then the answer to that is, sure, let’s [00:42:00] talk about a lease agreement, not let’s just do this under the table.

Donovan: Correct. Make sure that you have documentation that you can actually prove that this entity has trucks,

Donovan: Make sure you know who you are dealing with. Ask for some references, give me some information for companies that you’ve ran before. ’cause obviously if you’re calling me to buy my MC number, something about trucking, if they’re asking to book loads, okay, send me your COIs, send me your authority. It’s important that you prove that they have insurance, right? They’ll send you documentation. The thing is, you gotta vet it. Just make, I’m, I don’t mean to say, just don’t sell your MC number, right? But when you go through this process, make sure it is legal. Make sure the

Donovan: articles of incorporation, ‘ cause currently it’ll show you as the owner,

Donovan: right? If you do go through a sale, make sure that all of that stuff gets amended.

Caroline: There’s a whole process. You can we’ll put the link to it in the description. There’s a process that F-M-C-S-A has for transferring ownership of an mc. If you sell your business, you can do that but it takes time and paperwork and [00:43:00] it might cost a little bit of money and, but then it’s official you, but you just have to do things by the book.

Donovan: Correct. And yeah. And don’t go by word of mouth. Don’t agree to do something. ’cause this guy said he’ll pay you. Just don’t, because I’ve seen clients of ours get caught in a situation,

Caroline: Yeah.

Donovan: And it’s unfortunate because you wanna believe things in the industry is not where they need to be. So if you see an opportunity that, hey, okay, this might supplement some of my income

Donovan: and you’ll get excited, you’ll be like, okay, nice. This is something I can,

Donovan: something to look forward to.

Caroline: there’s a reason that there’s a fraud crisis in the industry. It’s because there are businesses that are really hurting and it’s really hard to make it in trucking, and it has been really hard to make it in trucking for the last two and a half years.

Donovan: Yep. Yeah, some of my favorite carriers have, sorry, Donna, we gotta cancel, man. We’re shutting down.

Donovan: Either they got caught up in these rate con takeover situations, or work for a broker who never had any intentions to pay them.

Donovan: They have to shut down their business. Look I’m doing something else.

Donovan: I can’t do this anymore.

Donovan: And it’s sad. So [00:44:00] that’s why you go by the book. Listen to what’s being said to you. Pick up on the cues, right?

Donovan: If they’re trying to shortcut anything, do not fall for it.

If you’re factoring, don’t submit a load that somebody else provided you. ‘ cause that’s what they do. They’ll get in cahoots with these brokers, or they’ll do a rate con takeover situation and. You’re gonna be, at the end of the day, you’re gonna be liable for that. ’cause that’s your mc number attached, right? So when it goes to legal and these things are starting to go through legal procedures, you are gonna be the one tied up in it.

Donovan: So if somebody wants to buy your mc yep. When somebody wants to buy your mc, make sure that you guys go through all of the legal steps, no shortcuts, because if they’re shortcutting you, they’re doing that for a reason. They’re trying to keep their name or their real name very far away from this.

Donovan: Real quick, another issue that’s happening,

Donovan: As you’re seeing job postings online or someone’s Hey I’m looking for drivers, Craigslist, wherever you might find it, what they’ll ask for you. Okay, send me a copy of your driver’s license. Send [00:45:00] me a copy of your insurance. Yeah, okay. Send me a copy of your mc authority. Provide me all the information of your company because you’re trying to sign on as an owner operator, right?

Caroline: Okay.

Donovan: So you’re sending all of this to these people that you think will legit hire you,

Caroline: As an owner

Donovan: As an owner operator, but guess what? You just gave a scammer every single thing about your MC number. You gave them a picture of your driver’s license,

Donovan: you gave them mc authority. You gave them everything about your entity, and now

Donovan: they can do whatever they want with that

Caroline: Yeah. And I’m thinking if someone does actually wanna engage you in a lease agreement with their business, you don’t need to send them an mc authority.

Caroline: You’re gonna be leasing onto their authority. So they don’t have any reason to ask you for your business’ information. First of all, maybe driver’s license, but you’re first gonna look at a lease agreement, and before that you’re probably gonna talk to some people who are leased onto this carrier so that you can vet them and make, and hopefully you’re gonna meet them in person

Donovan: correct.

Caroline: before you [00:46:00] sign anything or give away anything.

Caroline: That’s really tough. That’s, it’s so sneaky. And it’s not just with other carriers. There are all kinds of dispatchers out there.

Donovan: Yes.

Caroline: Might do this too. That’s potentially even more dangerous because in a dispatcher situation they are gonna ask you for all that information they are gonna ask you for your load board access.

Caroline: They are gonna ask you for your factoring account login, which you should never share with anyone.

Donovan: Yes,

Caroline: But it happens. It happens. ’cause you’re busy. ’cause you do everything for your business. It’s totally understandable. But it just should never happen.

Donovan: That, to your point on dispatchers, right? Okay, if you’re looking for a dispatcher, your dispatcher’s gonna need everything about your business,

Caroline: Right.

Donovan: right? So how do you sign on with new, Hey, I found this load on the load board, but you’re

Donovan: not signed up yet with this broker. I need all this information.

Donovan: And you’re gonna send it. So at the end of the day on all of these things it all comes down to the same thing. Who are you dealing with? Do you really trust this person? Is this a person that you know for a fact that’s in this business? On good terms, dispatch, [00:47:00] broker selling your mc from all of those angles, you need to know who you’re working with, right?

Donovan: I know it’s hard believe me,

Donovan: dispatch, finding good dispatch is difficult. So you will take the opportunity, you will take that chance like, Hey, I can get you great loads, you can pay me x amount of dollars.

Caroline: Tempting,

Donovan: sure it sounds good, right? It sounds good. But you gotta make sure that you know this dispatcher. Make sure that if you are sending any valuable information, that you know that this is going to a person that’s gonna use it for your purpose and your purpose only. Not all of the list of things that we just went over. I’m sure we could do this for three hours long and keep coming up with,

Caroline: We could, we’ve been talking for over an hour and then we still, there are so many scam types of scams. Thank you so much Donovan. We’re gonna wrap it up and I’ll hit you back up to have another conversation about what to do if a broker doesn’t pay, because I know that’s a huge one, but I’m glad that we got all of this out in the open.

Caroline: All of these different scams be really careful out there. Nothing is worth more than your business’s reputation and [00:48:00] nothing is worth more than your peace of mind. And your livelihood. And your wellbeing. So be careful out there. Know that if you’re factoring with us, we have your back. If you’re doing everything by the book, we’re gonna do everything that we can to make sure that you get paid and that we at least help you as much as we possibly can to help you get what you deserve from the work that you do.

Caroline: If you don’t factor with us information in the description about how to contact us. And if you have questions for Donovan, please leave them in the comments. We would love to find, get questions from you. And in the next time that we have Donovan on the show ask him those questions, get those answers.

Caroline: Also email hello@bobtill.com with any questions, concerns, comments that you have about the show. We hope you like this video and that you subscribe to the channel so you never miss out on another episode.

Donovan: Thanks for having me, Caroline.

Caroline: Thanks Donovan.