If you are reading Part 3 of this series, I recommend reading Part One and Part Two of the article.
So our two new double brokering friends invited us to their office. When we first met them at the cafe, they hesitated about taking us to the office. However, after we drank some coffee and got to know each other, they decided we were cool enough to be shown inside.
Before entering the office, we stopped at a small shop to purchase beer, dried fish called Vobla (which is extremely popular to eat with beer in post-USSR countries), and some chips.
Interestingly, the double brokering office was a rented room at a university. Inside, we were greeted by four other double brokers with the regular freight broker setup – two monitors, a phone, and an internet connection. They gracefully greeted us, and we sat on their couch to drink some beers and talk about the double brokering world. Darek, our videographer, was filming the entire conversation. Our double brokering friends started telling us how they get loads, who they typically get loads from, and how they cover it to make a lot of money.
Here are 10 takeaways I had after speaking to them:
- Keeping the motor carrier freight guard free is crucial. One double broker told us he cried after getting freight guarded for canceling 24 hours before pickup.
- A couple of years back, double brokering offices were on every corner of the capital in Yerevan. Some have closed, while others have consolidated.
- Most double brokers operating ensure the trucking company gets paid no matter what. They even have their own factoring company to guarantee payments. We were told they pay a lot to these companies and never get reimbursed by the brokers.
- Anyone that speaks even mediocre English is hired. Our receptionist in the hotel lobby told us he used to work as a double broker, but couldn’t handle the lying and deceit any longer. I have heard this from a few people.
- Most employees work strictly for commission and receive 30% of the gross profit.
- They have their own TMS software and carrier checking tool.
- None of them work with other double brokers. The irony is that none of the double brokers trust another double broker to cover their loads. Often, you may see a load posted with notes in Armenian – essentially telling Armenians not to call.
- All the double brokers we met have relationships with large 3PLs in the U.S. that tender them freight. Maintaining these relationships is just like any other relationship; you must communicate and service them on time. These 3PLs typically understand they are dealing with double brokers but turn a blind eye as long as everything goes smoothly.
- Getting a load from a broker and selling it to a carrier is triple the work and a more complex than what a regular carrier sales rep does in the U.S. If any of these double brokers became carrier sales reps, it would be a piece of cake for them.
- Lastly, the double brokers take on only a few loads per week to ensure they can cover them all without issues. This way, they can make a good living by Armenian standards (between $1,000 and $4,000 per month) and not worry about getting freight guarded. We visited smaller double brokering offices that focused on service. In contrast, larger operations are shadier and concentrate on volume.
After a couple of beers, the team wanted to show us how they have fun in the office by playing video games. During this time, I thought it would make sense to go on Instagram Live to show the FreightCaviar community the office. I showcased it to more than 250 people on Instagram for the next five minutes. This was the absolute worst mistake I could have made. Six scary-looking dudes stormed the office shortly after the Instagram post. They began screaming at everyone in Armenian and started beating up the person that had invited us. Then they took all our phones and recording equipment and deleted all our content.
The situation was very tense for the next 20 minutes. One of the scariest of the bunch told me I had to delete all my memes making fun of double brokers immediately. I did. Here are a few memes I was forced to delete from Instagram.
Once the situation cooled off, the six men invited us to a cafe to chat. Keep in mind that it was already midnight in Yerevan (2 p.m. in Chicago). Of course, we agreed, and they took us to the cafe at the Moscow Cinema.
The crew brought us a lot of food and drinks. We sat there for four hours talking to them until 4 a.m. about their double brokering operation. Overall, they believe they are doing nothing wrong. They believe freight brokerages are unethical for not paying them for loads even though they have paid the trucking companies. They appreciated the fact that we didn’t expose their MCs, and we enjoyed the fact that they didn’t hurt us. We hurried on to our hotel and went straight to bed.
After our crazy hiccup in the office, we enjoyed the beauty of Armenia for a couple of days before returning home. To check out the video we put together, click here.
Thanks for reading the series!
