Broker-Carrier Agreement Template: How to Write a Freight Broker Agreement

A broker-carrier agreement is the contract that sits underneath every load a freight broker moves. It is signed once, when a broker and a motor carrier first decide to work together, and it governs every shipment after that. When the agreement is written well, a cargo claim or an unpaid invoice already has an answer sitting in the document. When it is not, you end up arguing about who owes what after the freight is already damaged and the truck is three states away.

This guide walks through what a freight broker agreement is, the clauses that actually matter, how to write one step by step, and the mistakes that cost brokers and carriers real money.

What Is a Broker-Carrier Agreement?

A broker-carrier agreement is a master contract between a property broker (a freight broker licensed by the FMCSA) and a motor carrier (the trucking company that physically hauls the load). The broker matches a shipper's freight with available trucks; the carrier provides the equipment and driver and moves the goods.

The agreement is sometimes called a freight broker agreement, a transportation broker agreement, or a carrier packet agreement, because it usually arrives as part of the "carrier packet" a broker sends a new carrier alongside a W-9, insurance certificate request, and authority verification.

It is a master agreement, not a per-load document. The day-to-day work of booking a shipment happens on a separate rate confirmation. The master agreement sets the rules; the rate con fills in the lane, dates, and price for one specific load.

Who Are the Parties?

Two businesses sign:

• The broker holds FMCSA operating authority as a property broker (an MC number) and a $75,000 surety bond (the BMC-84). The broker does not own trucks; it arranges transportation.
• The carrier holds its own motor carrier authority (MC and USDOT numbers), runs the equipment, and employs or contracts the drivers.

Before signing, the broker verifies the carrier's authority is active, checks its safety rating and out-of-service history in the FMCSA's SAFER system, and confirms the insurance certificate is current. A carrier with revoked authority or an unsatisfactory safety rating is a liability the agreement cannot paper over.

Key Clauses in a Freight Broker Agreement

1. Independent Contractor Relationship

The agreement must state that the carrier is an independent contractor, not the broker's agent, employee, or partner. The carrier controls how the freight moves: route, equipment, drivers, hours. This clause matters because it keeps the broker out of the carrier's employment and vicarious-liability exposure. If a court treats the carrier as the broker's agent, the broker can be pulled into accident litigation it never bargained for.

2. Carrier Responsibilities

Spell out what the carrier agrees to provide on every load:

• Legal, properly maintained equipment that meets DOT standards
• Qualified, licensed drivers operating within hours-of-service rules
• Compliance with all federal and state transportation regulations
• Timely pickup and delivery per the rate confirmation
• Communication on delays, breakdowns, or accidents

3. Insurance Requirements

This is where most disputes are won or lost. A typical agreement requires the carrier to carry and keep in force:

• Auto liability: at least $1,000,000 (the FMCSA minimum is $750,000 for general freight; $5,000,000 for certain hazmat)
• Motor truck cargo: at least $100,000, higher for electronics, pharmaceuticals, or reefer loads
• General liability: commonly $1,000,000
• Workers' compensation as required by state law

Require the carrier to name the broker as a certificate holder and to give 30 days written notice before any cancellation or material change. Many brokers also carry their own contingent cargo policy as a backstop, but contingent coverage only responds when the carrier's primary cargo policy fails, so it is not a substitute for verifying the carrier's insurance.

4. Cargo Liability and the Carmack Amendment

Under the Carmack Amendment (49 U.S.C. 14706), the carrier that takes possession of the freight is liable for loss or damage, generally up to the full actual value of the goods. The agreement should:

• Confirm the carrier bears Carmack liability for the full value of the cargo
• Set a window for filing claims (often 9 months) and for the carrier to acknowledge and pay
• Prohibit the carrier from deducting or offsetting freight charges against a pending cargo claim
• Require the carrier to cooperate in the claim and preserve damaged goods for inspection

If the carrier wants to limit its liability to a per-pound figure, that limitation has to be negotiated and documented; it does not happen by default just because the carrier says so.

5. Prohibition on Double Brokering

A clean agreement bans the carrier from re-brokering, co-brokering, interlining, or assigning the load to anyone else without the broker's prior written consent. Double brokering is a leading freight-fraud vector: the booked carrier hands the load to an unvetted third party, the cargo disappears or is damaged, and nobody with insurance is holding the bag. State that any unauthorized re-brokering makes the original carrier fully liable for loss and forfeits its right to payment.

6. Back-Solicitation (Non-Circumvention)

The broker's relationships with its shipper customers are its core asset. A back-solicitation clause stops the carrier from going around the broker to haul directly for those customers. It typically:

• Runs 12 to 24 months after the last load moved for that customer
• Sets liquidated damages, often 15 percent of the gross revenue the carrier earns from the diverted customer
• Applies only to shippers the carrier was introduced to through the broker

Keep the scope reasonable. A clause that tries to lock up every shipper in the country forever reads as a restraint of trade and invites a court to throw it out.

7. Rates and Payment

The master agreement sets the payment framework; the rate confirmation sets the number. Address:

• That the rate confirmation controls the price for each load and is incorporated by reference
• Payment terms (net 30 is standard; quick-pay at a 1 to 3 percent discount is common)
• What paperwork triggers payment: signed bill of lading (BOL), proof of delivery (POD), and invoice
• Accessorials: detention, layover, lumper fees, and how they are documented and reimbursed

A few accessorials are worth defining in the master agreement so they do not turn into a fight on every load. Detention usually starts after two free hours at the dock and runs $40 to $75 per hour. Lumper fees, the cost of a third-party crew loading or unloading the trailer, are typically reimbursed against a receipt. Truck-order-not-used (TONU) charges apply when a broker cancels a booked load after the carrier has already dispatched. Spelling out which charges you honor, and what proof you need, keeps the carrier from inventing fees and keeps the broker from disputing legitimate ones.

8. Indemnification

Each party agrees to cover losses it causes. The carrier indemnifies the broker for claims arising from the carrier's operation of its trucks, its cargo handling, and its employees. Pair this with the insurance section so the indemnity is actually backed by a policy that can pay. A broad indemnification agreement clause is worth little if the indemnifying party has no assets and no coverage.

9. Term, Termination, and Governing Law

State that the agreement renews automatically and that either party may terminate on 30 days written notice, while obligations tied to loads already in transit, plus the insurance, indemnity, and back-solicitation provisions, survive termination. Name the governing state and where disputes are resolved.

How to Write a Broker-Carrier Agreement: Step by Step

Step 1: Identify and verify the parties. Use full legal names, MC and USDOT numbers, and principal addresses. Pull the carrier's authority and safety record in SAFER before you sign anything.

Step 2: Set the relationship. State plainly that the carrier is an independent contractor responsible for its own equipment, drivers, and compliance.

Step 3: Write the insurance schedule. List each coverage type with a minimum dollar limit, the certificate-holder requirement, and the 30-day cancellation notice.

Step 4: Assign cargo liability. Tie the carrier's responsibility to the Carmack Amendment, set the claims window, and bar offsets against freight charges.

Step 5: Add the fraud and circumvention controls. Ban double brokering and add a back-solicitation clause with a reasonable term and liquidated-damages figure.

Step 6: Define payment. Reference the rate confirmation, state net terms, and list the documents that trigger payment and the accessorials you will honor.

Step 7: Close with indemnity, term, termination, and signatures. Both signatories should have authority to bind their companies.

What the Rate Confirmation Adds

The master agreement is the rulebook; the rate confirmation is the one-page order for a single load. Because the agreement says the rate con is incorporated by reference, the two documents work together: the carrier cannot accept the load and later claim it never agreed to the master terms.

A usable rate confirmation lists the broker's load number, pickup and delivery locations with appointment windows, the commodity and weight, the trailer type, the agreed all-in rate, and any pre-approved accessorials. It should also restate the key obligations that come up most: no double brokering, required documents for payment, and who to call for a delay. Carriers move fast, and the rate con is often the only page a dispatcher reads closely, so the reminders earn their space.

Handling Cargo Claims Without a Fight

Cargo claims are where a broker-carrier relationship gets tested. The agreement should already say the carrier owns the liability, but the process matters as much as the principle. Set a clear sequence: the broker (or shipper) files a written claim within the agreed window, the carrier acknowledges it in 30 days, and the carrier pays or denies in writing within a set period such as 60 or 120 days.

Two rules prevent most of the trouble. First, bar the carrier from withholding freight charges on other loads while a claim is open; offsetting is a common pressure tactic that has nothing to do with the merits. Second, require both sides to preserve the damaged goods and the documentation, including the signed BOL noting any exception at delivery. A claim filed with a clean delivery receipt and photos resolves faster than one built on a phone call and a memory.

Broker-Carrier vs. Shipper-Broker Agreement

It helps to know which contract you are signing. A broker-carrier agreement governs the broker's relationship with the trucking company that hauls the freight. A shipper-broker agreement, by contrast, sits between the broker and the customer whose goods are being moved, and it covers credit terms, the broker's authority to arrange transportation, and how the shipper pays the broker. A working brokerage needs both. The broker-carrier agreement covered here is the one that decides who pays when freight is lost, late, or damaged on the road.

Common Mistakes to Avoid

Treating the rate confirmation as the whole contract. A rate con alone does not allocate cargo liability or insurance duties. Without the master agreement behind it, a damaged-freight claim has no framework.

Not verifying insurance on every load. A certificate from six months ago tells you nothing about today. Brokers who confirm coverage at booking, not just at onboarding, avoid the worst surprises.

Vague double-brokering language. "Carrier shall not re-broker" with no stated consequence is easy to ignore. Attach forfeiture of payment and full liability so the prohibition has teeth.

Overreaching non-circumvention terms. A back-solicitation clause that covers every shipper indefinitely is more likely to be struck down than enforced. Tie it to customers the carrier actually met through you and cap the duration.

Skipping authority and safety checks. The cleanest contract in the world cannot fix a carrier whose operating authority is revoked or whose safety rating is unsatisfactory. Vet first, sign second.

Where This Fits With Your Other Agreements

A freight broker agreement rarely stands alone. Brokers who lease their own trucks should pair it with an owner-operator lease agreement, and larger relationships often sit under a master service agreement that governs the broader commercial terms. If you also handle warehousing or final-mile delivery, a shipping service agreement covers the liability and transit-insurance details that a load-by-load broker-carrier contract leaves out.

Generate Your Broker-Carrier Agreement with Contractable

A broker-carrier agreement is not complicated once you know which clauses carry the weight: insurance limits, Carmack liability, a real double-brokering ban, and a back-solicitation clause a court will actually enforce. Contractable builds a customized freight broker agreement in minutes, with the insurance schedule, payment terms, and liability allocation set for your lanes and your customers. No legal background needed.