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Let’s Talk Contracts
Contracts govern relationships between two parties.
If you are a new freight broker, should you or do you need to be contracting at all? Who do you contract with and are all contracts the same?
Sometimes rates are included in contracts.
All load rates are negotiated but some are negotiated with an annual contract while others are dealt with individually. The latter type loads are called “spot” loads and you’ll be dealing with “spot” rates.
If you are new to brokering you most likely should not be contracting with a shipper for a number of reasons. Instead, you will negotiate each load individually – spot loads.
There’s a lot to be said about contract rates versus spot rates. In reality, spot rates are sometimes better than contract rates; and – sometimes contract rates are better than spot rates.
So, contracts with shippers are optional but, generally, should be avoided if you are a new freight broker. You will, however, require a load confirmation from the shipper for each particular load.
Now – what about contracting with carriers?
Yes, you will always require a written contract with carriers. You will send the contract (I call it an agreement) to the carrier. Once it is returned you’ll file it away and that’s about all you need to do.
However, for each particular load, you’ll also require a “load confirmation” that you will send to the carrier and you will dispatch the driver AFTER the confirmation is returned.
The load confirmation is a legally binding contract that requires both the carrier and broker to perform. Non-performance from either party may result in litigation.
I wish I could go into more detail on all of this (and I do in training) but here are the most important things to remember right now:
You do NOT need to spend $800 or $1,000 or more for an attorney to prepare your broker-carrier agreement. You do NOT want to use a generic agreement that you can find on the Internet. It may not be suitable.
(1) With my freight broker training you receive a detailed, four-page, time-tested Broker-Carrier Agreement. All you do is modify it with your information and, bingo!, you’re ready to go.
(2) Ditto that for the carrier load confirmations. You receive templates for four different spreadsheets depending upon how the shipper is paying.
These handouts will save you tons of time and money.
If you are ready to get started right now – call me or email me. I’m back in El Paso, Texas (trying to get disreorganized after being away for four months) and I’d love to help change your life!