Glossary
Broker-carrier agreement
A broker-carrier agreement is the master contract that governs the relationship between a broker and a carrier over time. Where a rate confirmation covers a single load, the broker-carrier agreement sets the standing terms that every load between the two parties runs under.
What it covers
Typical terms include payment timing and offset rights, the carrier's insurance obligations, allocation of cargo-loss liability, indemnification, and a prohibition on the carrier re-brokering or subcontracting the load to another carrier without permission. That anti-assignment clause is the contractual backstop against double brokering.
Its role in diligence
The agreement is also part of the paper trail of due diligence. A signed contract that specifies performance and liability terms is one of the things a documented vetting process produces, alongside verification of the carrier's authority and insurance. It records what the parties committed to; it does not, by itself, verify that the carrier on the other side is who it claims to be, which is where the federal record comes in. The agreement is a commercial contract between the parties, not a federal filing.
The re-brokering clause
The clause that draws the most attention is the one restricting the carrier from handing the load to another carrier. A carrier that signs an agreement forbidding re-brokering and then re-brokers the load anyway has both broken the contract and created the exposure the clause exists to prevent: freight on a truck nobody vetted, and a payment chain with an extra, undisclosed link.
A concrete case
A broker and a carrier sign a master agreement in January with 30-day payment terms, a cargo-liability requirement, and a no-re-brokering clause. Every load that year runs under those terms; each rate confirmation just fills in the lane and the rate. If a dispute arises on an August load, the January agreement is the document that governs it. The agreement records what the parties committed to; it does not verify who the carrier is, which is where the federal record comes in.
Related terms
Rate confirmation
The document a broker sends a carrier that sets out the agreed rate and terms for a specific load. It records what was agreed for that shipment and names the parties to it.
Carrier packet
The set of documents a broker collects to onboard a carrier: authority and insurance details, a W-9, contact and payment information, and a signed agreement. It is where carrier vetting is documented.
Negligent selection
A legal theory holding a broker or shipper responsible for harm caused by a carrier it hired without adequate diligence. Whether a vetting process was documented has been treated by courts as relevant.
fleetfax reads public FMCSA data and is not affiliated with FMCSA or the U.S. Department of Transportation. This page explains terminology; it is not legal advice.