Shipper carrier agreement template, section by section

What a shipper carrier agreement is for

When a carrier starts hauling for a shipper directly, without a broker in between, the two need a written agreement covering the relationship. Without one, every load is negotiated from scratch, and every dispute is argued from memory. A shipper carrier agreement, sometimes called a transportation agreement or motor carrier agreement, sets the ground rules once: how loads are offered, how rates and fuel are calculated, who's responsible for what, and how problems are handled.

The agreement is the umbrella. Each individual load is still confirmed separately, by a tender, a load confirmation or a rate confirmation, which lists that load's details and price and refers back to the agreement. Brokers have a similar document with carriers, the broker-carrier agreement, which carriers sign at setup with each broker.

Important: this is not legal advice

This page offers an original, plain-language outline of the sections most shipper carrier agreements contain, with notes on what each usually covers. It isn't copied from any company's document, and it isn't legal advice. Contract terms have legal consequences, especially around cargo liability, indemnities and insurance. Have a transportation attorney review any agreement before you sign one a shipper sends you, and before you use your own.

The template, section by section

Use these as the headings of your own agreement. The notes under each describe what that section typically addresses and what to watch for.

• +1. Parties. Legal names, addresses, the carrier's USDOT and MC numbers, and a statement that the carrier holds active operating authority. Watch: use exact legal names, not trade names.
• +2. Term. The start date and how long the agreement runs, often a year renewing automatically unless ended. Watch: automatic renewal and how much notice ends it.
• +3. Services. What the carrier will haul, with what equipment, and whether the carrier must accept every load or may accept or decline each tender. Watch: avoid committing to volume you can't cover.
• +4. Tendering loads. How loads are offered and confirmed, for example by email or portal, and that each load's details are set in a load confirmation that refers to this agreement.
• +5. Rates and fuel. Where rates are set out, usually an attached rate schedule by lane, plus a fuel surcharge formula naming the diesel index, base price and mpg. Watch: how and when rates can change.
• +6. Accessorials. Detention free time and hourly rate, layover, stop pay, truck ordered not used, lumper handling and any other charges, ideally in an attached schedule.
• +7. Invoicing and payment. What the invoice must include, such as the signed bill of lading, payment terms in days, and whether payment to the carrier's factoring company is allowed. Watch: long terms and conditions on payment.
• +8. Cargo liability. The carrier's responsibility for loss and damage to freight, and any agreed limit per load or per pound. Watch: this section has the biggest legal consequences; see below.
• +9. Claims. How and when cargo claims are filed, documented and resolved.
• +10. Insurance. The types and minimum amounts of coverage the carrier must carry, such as auto liability, cargo and general liability, and certificate requirements. Watch: limits above what your policy carries.
• +11. Indemnity. Who covers whose losses when something goes wrong. Watch: one-sided clauses that make the carrier cover the shipper's own negligence.
• +12. Independent contractor. That the carrier controls its drivers and equipment and is not the shipper's employee or agent.
• +13. Safety and compliance. That the carrier will follow federal and state safety rules, including hours of service, and maintain its authority.
• +14. Confidentiality. Rates and shipper information kept private.
• +15. Termination. How either side can end the agreement, with notice, and what happens to loads in transit.
• +16. Disputes and governing law. Which state's law applies and how disputes are resolved.
• +17. Signatures. Authorized signers for both sides, with dates.

Cargo liability and the Carmack framework

For interstate shipments, the main federal rule on cargo loss and damage is the Carmack Amendment, 49 U.S.C. 14706. As it's generally explained, it makes a carrier liable for the actual loss or injury to property it transports, with some defenses, and it sets minimum time periods for filing claims and lawsuits that a carrier can't shorten below. Carriers and shippers can agree to limit liability in some situations, for example through a written agreement on the value of the goods, and under federal law parties to a contract can, in writing, expressly waive some rights and remedies.

Because those rules are technical, this section of the agreement is where an attorney's review matters most. A shipper's standard agreement may ask the carrier to accept full liability with no limit, or liability above the carrier's cargo insurance. Know your policy's limit and exclusions before you sign, and make sure the agreement and your insurance match. Federal claim handling rules in 49 CFR Part 370 also set out how written claims are acknowledged and resolved.

Insurance: make the agreement match the policy

Shippers often ask for more insurance than the federal minimums, especially cargo coverage. Before signing, send the insurance section to your insurance agent and ask two questions: does my policy meet these requirements, and are there exclusions that conflict with what I'm agreeing to? Common surprises include higher required limits, a requirement to name the shipper as an additional insured, and cargo policies that exclude certain commodities, unattended vehicles or reefer breakdown. Fix the gap in the policy or the agreement before the first load, not after a claim.

When the shipper sends their agreement

Larger shippers usually have their own agreement and ask carriers to sign it. That's normal. Read it fully, and pay special attention to cargo liability, indemnity, insurance requirements, payment terms, fines and deductions, and any clause allowing the shipper to change terms by notice. You can ask for changes. Shippers expect some negotiation, and a reasonable request explained plainly, like matching cargo liability to your policy limit, is often accepted.

Keep a signed copy of every agreement with its date and any attached rate schedules. When rates or fuel formulas change, update the schedule in writing and keep the old one.

Rate schedules and fuel formulas

Most agreements put rates in a separate schedule attached to the main document, so rates can be updated without rewriting the agreement. A clear schedule lists each lane with origin and destination, equipment, the rate and its basis, such as per mile or per load, and the date it takes effect. The fuel surcharge formula goes with it: which public diesel price is used and from which week, the base price, the mpg figure and which miles the surcharge applies to.

When either side wants to change rates, the cleanest method is a new dated schedule signed by both. Keep every version. If a dispute comes up months later about what a load should have paid, the schedule in force on the load date decides it.

Agreements and the rest of your paperwork

The agreement works together with the other documents on every load. The load confirmation sets that load's details and rate. The bill of lading records the freight, including notations like shipper load and count. The invoice draws on all of them. When the documents agree, loads get paid quickly and claims are simpler. The accessorial charges calculator helps you turn the accessorial terms in your schedule into invoice lines.

For finding shippers in the first place, see our guide to direct shippers. For bid-based contract freight, see freight contracts for bid, and for government freight, military freight.