Who owes the freight
Carrier vs. shipper vs. broker: who owes the freight bill?
When a load is brokered and payment breaks down, carriers, brokers and shippers often disagree about who is liable. The answer depends on the documents and the facts.
The usual starting point
Traditionally, the shipper (consignor) has been primarily responsible for freight charges under the bill of lading, and a consignee who accepts delivery can in some circumstances also become liable. Brokers usually agree to pay the carrier under the broker–carrier agreement or rate confirmation, and the shipper pays the broker under their own contract.
Why it gets disputed
- Double payment: a shipper that already paid the broker usually objects to paying the carrier again. Courts have reached different results depending on the documents and facts.
- Non-recourse ("Section 7") provisions: some bills of lading include a signed non-recourse clause that can limit the carrier's ability to collect from the consignor.
- Contract terms: broker–carrier agreements often include no-backsolicitation and payment clauses that affect who the carrier can pursue.
- "Freight prepaid" vs. "collect" designations and who is named as bill-to party.
What to do
Gather the BOL (both sides, including any signed non-recourse clause), rate confirmation, broker agreement and payment records, and have a transportation-experienced attorney or agency review them before you contact the shipper. Meanwhile, consider a broker bond claim.
Not legal advice. This page is general information about U.S. freight-payment rules, not legal advice. Federal and state transportation law is technical, depends on the facts and changes over time. FMCSA rules on broker financial security were also being updated as of this writing. CollectionPlacement is a referral service, not a law firm or collection agency. Consult a transportation attorney about your situation.
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Frequently asked questions
Is the shipper liable for freight if the broker didn't pay the carrier?
It depends. Some courts have allowed carriers to recover from shippers under the bill of lading, while others have protected shippers that already paid the broker, especially where a non-recourse clause or contract terms apply.
What is Section 7 on a bill of lading?
It generally refers to a non-recourse provision on some bills of lading. When signed by the consignor, it can limit the carrier's ability to collect freight charges from the consignor. Its effect depends on the facts and the law.
Can a consignee be liable for freight charges?
In some circumstances, such as accepting delivery under a bill of lading that makes the consignee responsible. Federal rules also limit consignee liability in certain situations. Get advice on your facts.
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