Freight Charge Collection Attorney

Unpaid freight is a slow emergency. A broker stops paying on a few loads while promising the shipper's check is coming. A shipper deducts a cargo claim from open invoices without ever filing a claim. Detention and layover billing sits unpaid for months because nobody at the customer will approve it. Meanwhile the carrier has already paid for the fuel, the driver, and the equipment. By the time the amount is large enough to force action, the debtor is often in worse shape than it was when the problem started.

The Law Offices of Albert Goodwin collects freight receivables for carriers, brokers, forwarders, and warehouses in New York, and defends shippers and brokers against freight claims that are inflated, time barred, or already satisfied.

The Deadline That Catches Carriers by Surprise

Motor carriers do not get the ordinary six-year New York contract limitations period for their freight charges. Under 49 U.S.C. § 14705(a), a carrier providing transportation subject to federal jurisdiction must begin a civil action to recover charges for transportation or service within 18 months after the claim accrues. The mirror provision at § 14705(b) gives a person 18 months to bring an action against a carrier to recover overcharges. A carrier sitting on an aging receivable for two years, expecting to have six, discovers the problem at the worst possible time.

Several points follow:

• The claim generally accrues on delivery or on the date payment was due under the applicable tariff or contract, which makes the invoice and payment terms worth reading carefully in an older file.
• Brokers are not motor carriers. A broker suing for its brokerage fee under a contract is ordinarily subject to New York's six-year contract period rather than the 18-month federal period, though the characterization of the claim matters and is sometimes contested.
• A carrier's claim against a broker is often pleaded both as a federal freight charge claim and as a state contract claim, in the alternative, for exactly this reason.
• Where a shipment moves under a negotiated contract rather than a tariff, parties sometimes dispute whether the federal period applies at all. That dispute is better anticipated in the contract than litigated later.

Who Actually Owes the Money

Freight collection cases turn on a chain of parties, and the party that ordered the transportation is not always the party listed as consignor or consignee.

• The broker. Where a carrier hauled for a broker, the broker owes the carrier under the broker-carrier agreement and the rate confirmation, regardless of whether the shipper paid the broker. Contract terms making the broker's obligation contingent on receiving payment from the shipper are increasingly common and should be struck during negotiation.
• The shipper, after paying the broker. A shipper that pays the broker in good faith usually resists a second payment to the unpaid carrier. New York courts examine the bill of lading, whether the shipper knew it was dealing with a broker, and whether the bill contained a non-recourse or prepaid notation. The prudent step for a shipper is to require proof of carrier payment before releasing broker payments on large balances.
• The consignee. Acceptance of delivery can create liability for freight charges depending on the bill of lading terms and the parties' course of dealing, particularly where the bill is marked collect.
• Guarantors. Many credit applications contain a personal guaranty that the signer never noticed. That guaranty is frequently the fastest path to recovery. See personal guaranty enforcement.
• Factors and assignees. Where the carrier's receivables were sold to a factor, the factor may be the real party in interest, and a broker that paid the carrier after receiving a valid notice of assignment may be required to pay again.

Offsets, Deductions, and Chargebacks

The most common defense to a freight claim is not that the transportation was not provided. It is that the customer deducted something. Cargo damage, late delivery penalties, rework costs, retail chargebacks passed through from the customer's own customer, and detention billed in the opposite direction all appear as offsets.

Whether an offset is lawful depends on the contract and, for cargo claims, on whether the claim was ever properly presented. A shipper that deducts a cargo loss without filing a written claim complying with 49 C.F.R. Part 370 has not perfected anything, and the deduction can often be reversed. Contracts that expressly prohibit unilateral offset, and require claims to be presented and adjudicated separately from payables, are worth insisting on for exactly this reason. See cargo claims and the Carmack Amendment.

Detention, Accessorials, and Rate Disputes

Detention, layover, truck ordered not used, lumper fees, reconsignment, and fuel surcharge disputes share a common failure: the charge was incurred in the field and documented informally, then billed weeks later against a customer that has no record of approving it. Recovery depends on whether the governing agreement or rate confirmation established the charge in advance, whether the driver's records substantiate the time, and whether the customer's own gate and dock records corroborate it. Electronic logging data, gate timestamps, and GPS records are the evidence that makes these claims collectible, and they are usually available only if requested before the retention period expires.

Where a rate itself is disputed, 49 U.S.C. § 13710 provides a mechanism for resolving certain rate disputes, and shippers have a limited window to contest charges as overcharges. Practically, most rate disputes resolve on the documents: the rate confirmation, the tariff in effect, and the accessorial schedule incorporated by reference.

The Collection Sequence We Use

1. Document assembly. Signed rate confirmations, bills of lading, proof of delivery, the master agreement, the credit application and any guaranty, the invoice history, and every communication about payment. Weak documentation is fixable early and fatal late.
2. Debtor assessment. There is no point pursuing a judgment against a shell. We check for other lawsuits, judgments, liens, authority status, bond claims, and whether the entity is still operating, before recommending a strategy.
3. Demand. A well-supported demand from counsel, attaching the documents and identifying the guarantor and the bond, resolves a substantial share of these matters without suit, especially where the debtor's authority depends on maintaining its surety.
4. Bond and surety claims. A claim against a broker's $75,000 BMC-84 bond can produce recovery where the broker itself is insolvent, though bond proceeds are frequently shared pro rata among many claimants, which rewards moving early.
5. Suit. Filed in New York where venue permits, with contract, account stated, and unjust enrichment theories pleaded alongside the freight charge claim, and with the guarantor named.
6. Enforcement. Restraining notices, information subpoenas, bank levies, and receivable levies against the debtor's own customers. Enforcement is where freight judgments are actually collected. See commercial debt collection.

Defending Against a Freight Claim

We also represent parties on the receiving end. Effective defenses include the 18-month limitations period, payment to a broker where the shipper's obligation was discharged, rates that do not match the agreed confirmation, accessorials never authorized, service failures that support recoupment, and cargo claims that offset the balance. Where a factoring company sues a shipper or broker that already paid, the analysis turns on whether a valid notice of assignment was received and what it said.

You can contact us by phone at 212-233-1233 or by email at [email protected].