Intrastate Carrier Collection Concerns

What kind of protection does an Intrastate Carrier have when trying to collect on their freight bills? 

Carriers that haul within a state’s borders do not have some of the protections that Carriers hauling across state borders have. Freight moving across state borders or Interstate freight is governed by FMCSA and there are options that Carriers have available to collect on their freight billings. Interstate freight brokered to a Carrier is protected by a $75,000 Surety Bond, and if a Broker fails to pay, there is still the Shipper and Consignee that have potential liability. Intrastate freight brokered to a Carrier is not governed by FMCSA and does not have any bond protection.

Anyone Brokering Intrastate loads does not need specific authority to broker and frequently are just carriers subcontracting their overflow freight.

An additional risk that is created is the Broker/Carrier/Subcontractor will have the shipping order or bill of lading put in their name as the Carrier of Record and the Subhauler or actual Carrier is not named on the Bill of Lading at all.

This places the actual Carrier completely at the mercy of the Broker/Carrier/Subcontractor to pay the freight bill and, if they fail to pay, the actual Carrier has nowhere else to go. Even if you use an actual bonded Broker, their Surety Bond is exempt from Intrastate loads. No claim can be submitted against it for non-payment.

There are several valid reasons for a Carrier to utilize the service of a good factoring company, but protecting themselves against bad debt is one of the most important reasons of all.

A good portion of the time UC Factors spends servicing our Clients is spent checking credit, and rechecking credit, if the information is older than six months. This is exceptionally difficult for a small Carrier to do on their own.

Reliable credit services are expensive and interpreting the information is difficult, especially if you are not experienced. UC Factors has personnel with decades of Credit Analysis experience.

Speed is always a factor; our Clients need information in a hurry when freight from a new customer becomes available and a decision needs to be made right away. UC Factors is frequently responding within minutes from the time we are given the company’s information to check credit on.

Screening credit is the most effective way to make sure there are no credit losses, but staying on top of collections is vitally important also. UC Factors has a highly professional collection department that takes all necessary steps to keep collections current and makes sure that nothing slips between the cracks while handling your customer with professional care.

These are the advantages for intrastate carriers factoring their freight bills. With the additional credit concerns that exist for intrastate freight, UC Factors can lift some of the burden and risk off of Carrier’s shoulders and let them spend time performing and expanding their business.

 


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