Nonpayment Of Invoice

Broker may think there is a part of the agreement allowing them to withhold payment perhaps?

Are there any situations a broker may legally hold payment? And I'm not talking about any of the made up crap as in, "must send invoice and pod within 1 hour" or "carrier was 10 minutes late" or whatever nonsense policies some brokers conjure up.
Damage to product should be a cargo claim which is a separate thing from freight charges.

 

The shippers use that clause as their basis to defend against paying you, claiming they already paid the broker that was acting as the transportation company. They will use the legal standard that says just because one section of a contract was violated (non-payment) it doesn't render the rest of the contract invalid.

This is what we went thru collecting the $30k invoice, took a lot of work by the lawyers to get past that. Had it been a big name shipper used to freight brokers going belly up we may have lost but it was a auto recycler that was in over their head, large company but not used to dealing with freight payment claims. This was the first time they used a broker so their contract wasn't as good as it should have been, bad for them good for us.

 

Generally freight invoices must be paid as agreed and then any damages or other chargebacks can be settled afterwards. In the US the motor carrier doesn't have to surrender the freight, except household goods, until they are paid unless they have agreed to credit terms, which are usually included in the broker agreement. This waiver of rights is how many shippers get out of paying when their broker goes belly up.

 

I agree.
But the part you said about the brokers having some kind of an agreement about not going after the customers.

Picture this, the bill or summons comes in to the shippers desk. The shipper calls the broker and says something like "I got a bill or a summons from the trucking company, did you, or are you going to take care of it?"

Yea I bet any amount of money the broker settles that quickly. Or loses his customers

 

No problem with that, at that point you have the responsibility then to collect from the shipper and receivers. It holds up in court I've done it before.

 

Not easy at all, depending on the amount owed will dictate which level of court you file in, even the contract you first signed may stipulate what city and state you can bring action against someone in. If it is only a few thousand dollars it really isn't worth the fight as often you do not get your expenses awarded simply the original invoice amount minus any discounts due per the contract between the broker and you even though the broker is out of the picture.

My one success was for almost $30,000 and it cost about $10,000 in legal fees but there were other small carriers that were shafted by this broker as well, the shipper was not normally a shipper so they didn't know how to defeat us in court and I fight for right and wrong even if it costs me money. Really wanted to get the broker for fraud, he deliberately took their payment and disappeared -real scumbag. It took almost 18 months and several trips to court in Albany, NY to settle this, in the end we all made out but that is usually the exception not the rule.

Now a small invoice for say $3k, you may be able to bring action against the shipper in you local small claims court, they may not even take it serious and show up resulting in you getting a default judgement that you then can pay a few hundred bucks to the local Constable or Sheriff (depending on how your state works) and they will go enforce the judgement and collect for you.

It may also be worthwhile to contact a collections company, some will make a few attempts for a couple hundred dollars, or get a lawyer and pay them $500 to write a demand for payment letter, this works with smaller shippers that don't have legal teams at their disposal.