In the field of trucking and freight many issues are raised by brokerage, and especially sub-brokerage, of freight. For the uninitiated, a “broker of freight” or “freight brokerage” is an entity that serves as a middleman between one entity that has freight to ship, and another entity that engages in the act of shipping freight. Freight brokerage can, in some circumstances, be sub-brokered - that is, an entity that has contracted to carry freight may further contract with yet another entity to carry some or all of that freight. This is where companies can get into ruinous trouble. 1. Is Your Company Set Up Correctly? (Corporate Formalities) In the case of sub-brokerage, at issue is usually a company generally in the business of contracting to, itself, carry freight. Faced with a shortage of trailers, or drivers, or time, or even simply a contract too large to readily carry out, that company seeks to keep the contract, but sub-broker the carriage that exceeds its capacity. Ignoring all other legal issues, the decision to both carry freight and broker freight is fraught. What was one company has now effectively become two, a carrier and a broker. Problems arise when either the company, its customers (either for carriage or brokerage), or judges and juries still see only one company. “The focus of the court's inquiry must be on [the entity’s] role in the specific transaction... and the nature of the relationship [among the parties]. Schramm v. Foster, 341 F. Supp. 2d 536, 2004 U.S. Dist. LEXIS 16875, 549, 31-32 (D. Md. 2003), cited with approval in, Jones v. C.H. Robinson Worldwide, Inc., 558 F. Supp. 2d 630, 638-639 (W.D. Va. 2008). If you have a carrier company and a brokerage working with the same employees in the same space at the same time, it may be unclear even to them whether they are working for the carrier or working for the broker. Worse, as discussed below, they may actually be doing both: “‘...the difference between a carrier and a broker is often blurry...’" TRG Holdings, LLC v. Leckner, 2006 U.S. Dist. LEXIS 70781, *5 (E.D. Va. 2006). The carrier company itself may invite the problem: are the carrier and the broker the same company? Does the company itself make any operational distinction between its carriage operations and its brokerage operations? If it looks like one company, one misstep by either side, brokerage or carriage, may expose all of it to liability and litigation. In some cases a company argues that it is a broker, but found to be a carrier, and vice versa. Nat'l Union Fire Ins. Co. v. All Am. Freight, Inc., 197 F. Supp. 3d 1376, 1382 (S.D. Fl. 2016) (Company argued it was a broker, but found to be a carrier in part because of signage calling itself a "total transportation service provider"), see, TRG Holdings, supra at *5-6 (Motion to dismiss denied so that discovery could be conducted to test claim that broker was, in fact, a carrier).