If you’re just getting started in the freight brokerage industry, it’s important to understand how freight brokers pay carriers. This article will break down how the process works and what you can do if you’re not paid what you’re owed.
How Much Do Freight Brokers Pay Carriers?
The amount that freight brokers pay carriers depends on a number of factors, including the type of freight being transported, the distance it will travel, and the current market conditions. In general, brokers pay carriers a percentage of the total cost of the shipment.
For example, let’s say you’re shipping a load of refrigerated goods from California to New York. The total cost of the shipment is $10,000. If the broker’s standard rate is 10%, the carrier will be paid $1,000 for transporting the load.
However, if market conditions are such that carriers are able to command a higher rate, the broker may pay a higher percentage. For example, if market conditions are such that carriers can command a 15% rate, the carrier would be paid $1,500 for transporting the same load.
How Do Freight Brokers Pay Carriers?
In most cases, freight brokers pay carriers within 30 days of the shipment being delivered. However, some brokers may offer terms of up to 60 or even 90 days. In some cases, brokers may also offer advances on payments, which can be helpful for carriers who need quick access to funds.
What if I’m Not Paid What I’m Owed?
If you’re a carrier and you don’t receive the full amount that you’re owed, there are a few things you can do.
First, you should contact the broker and ask for an explanation. It’s possible that there was an error in the calculation of your rate or that the broker is facing financial difficulties and is unable to pay you the full amount at this time.
If the broker is unable or unwilling to provide a satisfactory explanation, you can file a complaint with the Federal Motor Carrier Safety Administration (FMCSA). The FMCSA is the federal agency that regulates the freight brokerage industry.
You can also file a lawsuit against the broker. However, it’s important to note that brokers are required to have bonding in place in order to operate. This means that if a broker doesn’t have the money to pay you, the bonding company will be responsible for paying you the amount you’re owed.
Freight brokers pay carriers by negotiating a percentage of the overall cost of the shipment. This amount can vary depending on market conditions and how much the carrier is able to command at that time. If you’re not paid what you’re owed, there are several steps you can take, including contacting the broker and filing a complaint with the Federal Motor Carrier Safety Administration (FMCSA).