How do brokers pay carriers?
Brokers pay carriers on the rate confirmation agreed at booking, after the carrier submits proof of delivery (POD) and an invoice — typically net-30 standard terms, with most carriers using QuickPay (net-2 to net-7 for a 1.5-3% fee) or factoring to accelerate payment.
Every brokered load starts with a rate confirmation, a signed contract that locks in the carrier's pay before the truck rolls. After delivery, the carrier submits the POD (signed bill of lading) and an invoice — most commonly via the broker's online portal or by email. Standard terms are net-30 from receipt of clean paperwork; bigger carriers with strong relationships sometimes negotiate net-15 or net-7. Two acceleration paths exist. QuickPay is the broker's in-house early-pay program: pay a 1.5-3% fee and get paid in 2-7 days instead of 30. Factoring is a third-party arrangement where the carrier sells the invoice to a factor for ~1.5-4% of face value and gets paid same-day; the factor then collects from the broker on standard terms. Both add up: a carrier averaging $200K/month in factored revenue at 3% gives up $72K/year for the cash-flow benefit. Direct-shipper relationships often skip the broker margin entirely and pay net-30 or net-45 on the shipper's standard AP cycle.
- Is QuickPay or factoring better?Depends on volume mix. QuickPay only works on loads from brokers that offer it — typically the larger digital-freight platforms. Factoring works across every broker and direct shipper you haul for, so high-volume carriers with diverse customer mixes usually prefer factoring. The break-even is usually around $100K/month in trucked revenue: below that, QuickPay's per-broker setup is fine; above, factoring's one-vendor relationship wins.
- What's a clean POD?A bill of lading signed at delivery by the receiver with no exceptions noted (no damage claim, no overage/shortage notation). A clean POD starts the broker's payment clock; an exception POD usually triggers a 5-30 day claim hold while the broker validates the damage with the shipper.
- Can a broker hold payment for chargebacks?Yes — most broker contracts give the broker the right to offset detention disputes, lumper reimbursements, claims, and late-fee accessorials against the rate. Reputable brokers itemize the chargeback in the remittance; the carrier disputes via the broker's claims process. Unilateral chargebacks without notice are a red flag and a common complaint that leads to broker bond claims.