The American Trucking Associations and the Owner-Operator Independent Drivers Association are cautioning members about the use of a model broker-carrier agreement recently released by the Transportation Intermediaries Association.

ATA said says it believes that the agreement “inherently favors the interests of brokers and their shipper customers in many instances.”
One example: The TIA contract provides for the carrier to receive payment from the broker, whether or not the broker is paid by the carrier. Also, if the broker doesn’t pay the carrier, the contract gives the carrier the right to seek payment from the carrier. But it prohibits the carrier from seeking payment from a shipper who has already paid the broker.
The provisions, says ATA, would eliminate the motor carrier’s right to collect unpaid freight charges from a shipper who has an agency relationship with its chosen broker.
The TIA contract includes a provision that could shorten the 120-day period motor carriers currently have by law to react to cargo claims, with a default to full-carrier liability, ATA notes. It also cautions against a provision creating exposure to consequential damages related to unauthorized re-brokering of loads.
Giving the contract “a big thumbs down,” OOIDA President Jim Johnston said they strongly recommend that truckers not sign the contract. “It’s obvious that the model contract certainly would not be beneficial to the trucker at all,” he stated. “In fact, it could be detrimental to any rights or remedies you might have in dealing with problems with the broker.”
TIA said the committee that developed the contracted included an equal number of asset-based and non-asset-based members. The sole objective, said TIA President/CEO Robert Voltmann, “was to create a fair and balanced template contract that would raise the standard and suit the best interests of both brokers and carriers.”
Rick Staller, president of Bee Trucking and chairman of the TIA Motor Carrier Conference, said the standardized contract will “create efficiencies and save me a great deal of time.” He added that it covers two big issues for carriers. “It obligates brokers to pay even if they don’t collect from the shipper and allows for recourse if the broker doesn’t pay within an agreed time frame. As such, the ITA Model Broker-Carrier contract offers better protection to the carrier than any previous contract.”
ATA has authored a model carrier/broker agreement that is currently being reviewed by the U.S. Justice Dept. and is expected to be released within a few weeks. In the meantime, the group is reminding its members that they are under no obligation to accept terms of the TIA contract and, before signing, they should consult with their own attorneys.
The model contract can be downloaded at www.tianet.org. A pass code is required but the code is available free with registration.