Carrier Payment Terms and Disputes: Records That Settle Them

Payment terms come from the agreement

Under 49 U.S.C. 14101(b), a carrier may contract with a shipper to provide specified services under specified rates and conditions, and the parties may in writing expressly waive rights and remedies under the motor-carrier part of Title 49. They cannot waive registration, insurance or safety-fitness provisions. The exclusive remedy for breach of such a contract is an action in state or federal court unless the parties agree otherwise. Payment timing, documents required before payment and any quick-pay fee are therefore questions for the signed carrier agreement and rate confirmation.

The regulations supply a default where credit is extended under tariff. Under 49 CFR 377.203, the credit period starts the day after the freight bill is presented, runs 15 days including weekends and holidays, and can be changed by tariff rule to no more than 30 calendar days. Under 49 CFR 377.205, the carrier presents its bill within 7 days, excluding weekends and holidays, of receiving a prepaid shipment or delivering a collect one, and the bill or an accompanying notice states the payment deadline and late-payment terms. Whether these rules govern a particular brokered contract is a legal question; 49 CFR 371.10 says a broker acting for a party bound by billing or payment rules must also follow them.

Sources: 49 U.S.C. 14101: providing transportation and service; contracts with shippers; 49 CFR 377.203: extension of credit to shippers; 49 CFR 377.205: presentation of freight bills; 49 CFR 371.10: duties and obligations of brokers

The records a broker must keep, and who may see them

49 CFR 371.3 requires a broker to keep a record of each transaction for three years. It must show the consignor, the originating carrier's name, address and registration number, the bill of lading or freight bill number, the broker's compensation and who paid it, any non-brokerage service and its compensation, and the amount of any freight charges the broker collected with the date of payment to the carrier. Each party to a brokered transaction has the right to review that record.

In a payment dispute, that last field is the one to produce first. A recommended practice is to keep it linked to the load reference, invoice, proof of delivery and the payment reference in your carrier review log, so the person answering a carrier's call can see what was billed, what was paid, to whom and when, without reconstructing it from email.

Sources: 49 CFR 371.3: records kept by brokers

Pay the right party when an invoice is factored

Under UCC 9-406(a), as published in the uniform text, an account debtor may pay the original creditor until it receives an authenticated notification that the amount has been assigned and that payment is to be made to the assignee. After that notification, paying the original creditor does not discharge the obligation. Under 9-406(b), a notification that does not reasonably identify the rights assigned is ineffective, and under 9-406(c) the account debtor may ask the assignee for reasonable proof of the assignment; until that proof is furnished, paying the assignor still discharges the debt. Each state enacts its own version, so confirm the governing text with counsel for a contested payment.

Treat a notice of assignment as a change to the payee and verify it outside the channel it arrived through, using the same steps as any request to verify a changed payment instruction. A UCC financing statement naming a factor as secured party is a public filing; it is not the notification 9-406 describes and does not show which invoices were assigned.

Sources: Uniform Commercial Code 9-406: discharge of account debtor and notification of assignment (LII official text)

When the broker does not pay: the BMC-84 or BMC-85 claim

49 CFR 387.307(a) requires a broker to keep a $75,000 surety bond (Form BMC-84) or trust fund (Form BMC-85) that provides for payments to shippers or motor carriers if the broker fails to carry out its contracts or arrangements for transportation. When the surety or trustee makes a payment that takes the security below $75,000, whether with the broker's consent, on a judgment or after the broker failed to respond to a claim within 7 business days, or determines that the broker is in financial failure, it must notify FMCSA within 2 business days. FMCSA then gives the broker 7 business days to show the notice was wrong, restore the security or satisfy the claims, or have its authority suspended.

Financial failure means a payment or default under 387.307(e) that the broker did not cure. The provider then cancels the filing and FMCSA posts the cancellation in the FMCSA Register; claims are then accepted for 60 calendar days. A bankruptcy filing by itself is not financial failure under 387.307(f)(2). FMCSA's June 26, 2026 guidance says the agency does not act as an intermediary in financial-security or payment disputes or resolve the merits of individual claims; it may investigate clerical errors and erroneous drawdown notices. For the current deadlines, read the 2026 financial-responsibility rules, and confirm which filing a broker holds before sending a claim.

Sources: 49 CFR 387.307: property broker surety bond or trust fund; FMCSA June 2026 FAQ

A UCC filing is not a payment-risk verdict

A financing statement against a carrier or broker records secured financing and names a secured party, such as a lender or factor. It does not show a balance, a missed payment or an inability to pay. Counting filings across states compares different populations: VerifyCarrier's UCC coverage documentation describes history from Florida, Colorado, Connecticut and Oregon, each published on its own schedule. For how to match a debtor and read a filing chain, see what a UCC filing can tell a broker.

Sources: VerifyCarrier UCC coverage and matching documentation

Keep freight moving when a payment relationship breaks

Recommended steps when a carrier stops answering, loses authority or disputes a payment while loads are open. List each open load as in transit, delivered and unbilled, billed and unpaid, or disputed, and give each one a named owner. Check the carrier's current authority status before tendering anything new. Pay undisputed amounts on their terms and hold only the disputed portion your agreement allows, recording the reason against the invoice.

Keep the freight and the money questions apart. FMCSA's fraud guidance says that holding loads hostage until paid is illegal, and that a carrier holding a fraudulently brokered load may itself be a victim. Work toward delivery first. If someone new claims to be the carrier's successor or payee, verify that party independently before changing the payee or arranging a replacement carrier for the remaining loads.

Sources: FMCSA: Broker and carrier fraud and identity theft; 49 U.S.C. 13905: suspension, amendment and revocation of registration