One of the most important documents you will need is a broker/shipper agreement when starting a freight brokerage. This document outlines the terms and conditions to include. It’s important to have this in place before you start doing business with them, as it will protect both you and your partners.
Your broker/shipper agreement should include:
- The names and contact information of both parties
- A description of the services to be provided
- The broker’s fee percentage or rate
- The terms of payment
- The broker’s right to sub-broker the load
- Liability and indemnification clauses
- A clause that states the agreement can be terminated by either party with written notice
Broker/Shipper Agreement Template
This agreement is made and entered into by and between ____________, hereinafter “Broker”, and _____________, hereinafter “Shipper”.
1) The Broker agrees to provide transportation services for Shipper pursuant to the terms of this Agreement.
2) The Shipper hereby appoints the Broker as its sole and exclusive broker for the purpose of arranging transportation services.
3) The Broker shall use reasonable efforts to obtain transportation services at the best possible price and terms, taking into account all relevant factors, including but not limited to time, place, availability, and routing.
4) The Broker shall provide the Shipper with a written quotation for each load including all relevant information such as price, routing, and expected transit time. The Shipper may accept or reject the Broker’s quotation in its sole discretion.
5) If the Shipper accepts the Broker’s quotation, the Broker shall arrange for transportation services pursuant to the terms of this Agreement.
6) The Broker’s fee shall be a percentage of the transportation charges, as set forth in the quotation provided to the Shipper. The Broker shall invoice the Shipper for its fee after transportation services have been rendered and the Shipper has been invoiced by the carrier.
7) The Shipper shall pay the Broker’s invoices within thirty (30) days of receipt.
8) The Broker shall have the right to sub-broker any or all of the load(s) covered by this Agreement.
9) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS OR REVENUE, arising out of or related to this Agreement.
10) The terms of this Agreement shall be governed by the laws of the State of ____________.
11) This Agreement may be terminated by either party upon thirty (30) days’ written notice to the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
BROKER: ___________________________
Signature: ___________________________
Typed or Printed Name: ___________________________
A freight broker/shipper agreement is important because it outlines the terms and conditions between you and your shipper partners. This document protects both you and your partners by detailing the services to be provided, the broker’s fee percentage or rate, the terms of payment, the broker’s right to sub-broker the load, and liability and indemnification clauses. The agreement should also include a clause that allows either party to terminate the agreement with a written notice.
In addition to a broker/shipper agreement, you will also need other forms and documents when starting your freight brokerage. These include:
Surety Bond
A surety bond is a type of insurance that protects your customers from losses caused by you or your employees. You must obtain a $75,000 surety bond before you can apply for freight broker authority from the Federal Motor Carrier Safety Administration (FMCSA).
Freight Broker Authority
Freight broker authority is required to operate a freight brokerage business in the United States. The Federal Motor Carrier Safety Administration (FMCSA) issues freight broker authority. You must have a surety bond in place before you can apply for freight broker authority.
Carrier Agreements
Carrier agreements are contracts between your freight brokerage and the trucking companies that you work with. These agreements set forth the terms and conditions under which the carrier will provide transportation services to your customers.
Bill of Lading
A bill of lading is a document that transfers ownership of goods from the shipper to the carrier. The bill of lading must accompany the shipment and must be signed by the carrier.
Invoices
Invoices are used to bill your customers for the transportation services that you provide. You will need to create an invoice for each load that you ship. The invoice should include all relevant information such as the price, routing, and expected transit time.
Brokerage Agreement Template
A brokerage agreement is a contract between your freight brokerage and a shipper. The brokerage agreement sets forth the terms and conditions under which you will provide transportation services to the shipper.
The following is an example of a brokerage agreement.
This agreement is between ____________ (the “Broker”) and ___________ (“Shipper”).
1) The Broker shall provide the Shipper with a quotation for the transportation of goods from ____________ to ___________. The quotation shall include all
2) The Shipper shall provide the Broker with a purchase order for the transportation of goods. The purchase order shall include all relevant information such as the origin and destination of the shipment, the commodity to be shipped, the weight and dimensions of the shipment, and the desired transit time.
3) The Broker shall arrange for the transportation of the goods from the origin to the destination. The Broker shall select the carrier and route of transportation.
4) The Broker shall provide the Shipper with a bill of lading for the shipment. The bill of lading shall be signed by the carrier.
5) The Broker shall invoice the Shipper for the transportation services rendered. The invoice shall include all relevant information such as the price, routing, and transit time.
6) The Shipper shall pay the Broker within thirty (30) days of receipt of the invoice.
7) The Broker shall provide the Shipper with proof of insurance for the shipment. The insurance shall be in an amount not less than ___________ dollars.
8) This Agreement shall be governed by the laws of the State of ___________.
9) This Agreement shall remain in effect until ___________.
Date: ___________________________
BROKER: ___________________________
Signature: ___________________________
Other Forms Needed to Start and Run a Freight Brokerage
In addition to the forms listed above, there are a few other forms that you will need in order to start and run your freight brokerage business. These forms include an operating agreement, a registration statement, and a power of attorney.
Operating Agreement
An operating agreement is a contract between a limited liability company (LLC) members. The operating agreement sets forth the rights and obligations of the members of the LLC.
Registration Statement
A registration statement is a document filed with the FMCSA to register your freight brokerage business. The registration statement must be renewed every year.
Power of Attorney
A power of attorney is a document that grants another person the authority to act on your behalf. You will need to grant a power of attorney to your registered agent.
Conclusion
The broker/shipper agreement is a contract between your freight brokerage and a shipper. The agreement sets forth the terms and conditions under which you will provide transportation services to the shipper. The bill of lading is a document that is used to transfer ownership of goods from the shipper to the carrier. The invoice is a document that you will use to bill the shipper for the transportation services rendered. The operating agreement is a contract between a limited liability company (LLC) members. The registration statement is a document that is filed with the Federal Motor Carrier Safety Administration (FMCSA) in order to register your freight brokerage business. The power of attorney is a document that grants another person the authority to act on your behalf. These forms are essential to the operation of your freight brokerage business.