Freight payment and factoring glossary
Plain definitions of the freight payment terms carriers sign without reading, from advance rate to notice of assignment.
- Advance rate
- Advance rate is the percentage of a freight invoice's face value that a factoring company pays you up front, before the broker has paid anything.
- Bill of lading (BOL)
- A bill of lading is the document that acts as the receipt for the freight, the contract of carriage between shipper and carrier, and, in some forms, the document of title to the goods.
- Debtor credit check
- A debtor credit check is an assessment of whether the party who owes you money on a load, normally the broker or the shipper, is likely to pay it.
- Detention pay
- Detention pay is compensation a carrier bills when a driver is held at a shipper or receiver beyond an agreed amount of free time.
- Double brokering
- Double brokering is the practice of a party accepting a load and then handing it to another carrier without the authority or the disclosure required to do so.
- Lumper fee
- A lumper fee is the charge for third-party labor that loads or unloads the trailer at a warehouse, paid at the dock and normally reimbursed by the broker or shipper.
- MC number
- An MC number is the motor carrier operating authority number issued by the Federal Motor Carrier Safety Administration to a company authorized to transport regulated freight or to arrange it for others.
- Notice of assignment
- A notice of assignment is a legal notice telling a broker that a carrier's right to be paid on an invoice has been transferred to a factoring company, so payment must go to the factor.
- Quick pay
- Quick pay is a broker's offer to pay a carrier's invoice earlier than the standard terms in exchange for a discount on the invoice amount.
- Rate confirmation
- A rate confirmation is the document a broker issues that sets out the agreed rate and the terms for a specific load, and which becomes the contract for that movement once signed.
- Recourse factoring
- Recourse factoring is an arrangement in which the factoring company can charge an unpaid invoice back to the carrier, so the carrier keeps the credit risk on the broker.
- Reserve account
- A reserve account is the portion of each factored invoice that the factoring company holds back and releases, minus its fees, after the broker pays.