What is A Broker Carrier Agreement?

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What is A Broker Carrier Agreement?

freight brokering

November 23, 2021

Freight Brokering

It may seem like we produce tons of content about paperwork, and this is true. We’ve covered the various pieces of paperwork that go into trucking across many blogs. Everything from the Bill of Lading to Load Confirmations has been covered at one point or another. We wouldn’t discussit so often if it wasn’t important, and this blog is no exception. Whether you’re an owner operator truck driver, or a driver working for a hauling company, knowing the basics of the paperwork involved in your job is important. This time we’re going to get into the broker-carrier agreement and discuss everything you need to know to properly fill one out.

What Is a Broker-Carrier Agreement?

A broker carrier agreement is another document that you will see on every job. It’s the document that outlines most of the monetary aspects of the job. A typical broker-carrier agreement will include both the broker and the carrier’s personal and contact information, the date that the two parties came to an agreement, the days when the carrier will be paid, the requirements for invoicing, and the liability and insurance that the carrier will need to have and be aware of before beginning the job. Some of these aspects are quite simple, such as the broker and carrier’s name and information, to come by. Obviously,the date that the two parties came to an agreement is another piece of information that is easy to acquire, along with the days that the carrier will be paid. However, some of the other aspects of the document are a little more complicated.

What Do I Need to Know About Insurance?

The liability and coverage that a carrier will need as per the agreement will vary with every job. There are some basic levels of insurance that every carrier, or carrier company should already have, but some jobs may highlight more liabilities that the carrier will need to be aware of, and some other types of insurance that they might not already have, depending on the job. The carrier will basically always be responsible for any damage that occurs to the cargo being transported, along with any damage sustained to the truck that is carrying the freight, and the driver whois in control of the truck. These are more or less the basics of what a carrier company needs to have insurance, and coverage for going into a job, and brokers will check to ensure that all of these policies are in order. With the basic information needed for a broker-carrier agreement covered, let’s talk about how you negotiate with a broker.

Do I Need to Know How to Negotiate?

Finding a broker is the easy part of this whole operation. You can go on a load board at any time and find a number of brokers that are looking for carriers to complete hauling requests, but after you get in contact with a broker, how do you come to a payment number that satisfies both of you? You’re going to have to negotiate with the broker to some extent. Some brokers will be more open to negotiation to others, but if you take a job that you feel as though should have a higher rate, then don’t be afraid to try and barter with the broker.

Why Does the Broker-Carrier Agreement Matter?

The broker-carrier agreement may just seem another piece of annoying paperwork, but the truth of the matter is,this should be the one that you look at with the most caution. This document not only outlines how much a carrier will be paid for a job, but it also covers all of the insurance information that is essential for the job. This ensures that if something happens on the job, then everyone will be covered properly.The broker-carrier agreement is attached to every job for a reason. Make use of it and fill it out properly.

Is There Anything Else I Need to Know?

As I mentioned before, the basic framework of a typical broker-carrier agreement is made up of the broker and the carrier’s names and information, details about payment, and the insurance and liabilities that the owner-operator needs to have and be aware of going into the job. The only thing to be aware of at this point is to know where you stand insurance wise, and to ensure that you are filling out every form that comes your way with accuracy. The last thing you want is to end up in a lawsuit because of a mistake on a form. When filling out a form, keep this information in mind, and you’ll be just fine.

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