Co-Brokering or Double-Brokering?

Co-brokering and double-brokering are two terms that are often misinterpreted and wrongly
interchanged, yet both have their own precise meaning, hence the importance of understanding them
well to be able to properly advise our clients and avoid any misunderstandings resulting from linguistic
confusion.

Here is a brief definition for both of these terms:

Co-Brokering
Co-brokering is a collaboration between two brokers.
The involvement of two brokers to ensure an efficient service before merchandise is being passed on
to the carrier often occurs for logistical reasons such as knowledge of a foreign territory or a
specialized type of transportation, or expertise in a particular field such as perishable products.

Co-brokering is perfectly legal, as no party pretends to be an entity it is not. Rather, it is a strategic
collaboration whose goal is to increase the efficiency of the transportation chain.

Double-Brokering
Double-brokering involves two carriers.

Double-brokering occurs when one carrier passes on its merchandise to a second carrier. In doing so,
the first carrier improperly uses a broker's license rather than the carrier's license under which the
contract was made. Or worse, the carrier might not even hold a broker's license, acting illegally.

This lack of transparency generates risks for the original broker, such as the absence of a proof of
insurance provided by the second carrier. Moreover, it already happened that the intermediary party,
in this case, the carrier at fault, refuses to pay the carrier to whom the merchandise was entrusted.
The latter then has no other choice than to reach out to the original broker or the consignee.

To avoid these misunderstandings, the United States has banned double-brokering.
However, in Canada, double-brokering is not prohibited. So in order to avoid this situation, a
clause to this effect must be added in the contract between the broker and the carrier.

To sum up, co-brokering is a positive collaboration between two brokers, while double-brokering
involves two carriers and results in a lack of transparency from the initial carrier, an issue that can
lead to several inconveniences.