Who Pays Unpaid Freight Charges? Shipper, Broker, Carrier

Key Takeaways

• On interstate loads, courts start by presuming the shipper is primarily responsible to the carrier for freight charges. The bill of lading, a signed non-recourse clause, a contract or a waiver can change that.
• A broker in the middle does not let the shipper off in every case. A federal appeals court held a shipper liable even though it had paid its broker. Other courts ruled for shippers that were not part of the deal, and a waiver the carrier signed can end the claim.
• A carrier suing for its charges must file within 18 months after the claim accrues, and a freight claim accrues on delivery or tender of delivery.
• Every registered freight broker must keep $75,000 of financial security on file with FMCSA. That freight broker bond is available for unpaid freight charges, and it is shared by every claimant.
• Southwest Recovery Services recovers unpaid freight invoices for carriers and brokers. At Southwest Recovery Services the contingency fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee. Request a quote.

In this guide

• Who owes the freight charges: the starting rule
• When the shipper is not responsible
• A broker in the middle does not let the shipper off
• Court decisions at a glance
• What federal law says about shipper and consignee liability
• Paperwork decides most disputes
• The 18-month deadline for carriers
• Freight broker bond: how to claim when the broker does not pay
• What this guide does not cover
• How Southwest Recovery Services helps
• Frequently asked questions

Who Owes the Freight Charges? The Starting Rule

The short answer: on interstate shipments the shipper is presumed responsible for the freight charges unless the paperwork or a contract says otherwise. A carrier hired by a broker may be left with only the broker, and a registered broker’s $75,000 bond is a second source of payment.

When a load is delivered and the invoice goes unpaid, the first question is who owes the money. The answer depends on the paperwork, on who you contracted with, and on whether the shipment crossed state lines. For interstate shipments, courts have long started from the position that the shipper (the consignor) is primarily responsible to the carrier, unless the paperwork says otherwise.

• The U.S. Supreme Court described the bill of lading as “the basic transportation contract between the shipper-consignor and the carrier.” Unless the bill provides otherwise, the consignor remains primarily liable for the freight charges, and a consignor that does not sign the bill’s “non-recourse” clause stays primarily liable. The carrier’s own lapses in following credit rules did not excuse the shipper. Southern Pacific Transportation Co. v. Commercial Metals Co., 456 U.S. 336 (1982). That was a railroad case; the Ninth Circuit has since applied it to motor freight bills of lading.
• The Fifth Circuit, which covers Texas, says that on interstate shipments the shipper is “ordinarily” presumed primarily liable to the carrier, and that the presumption can be rebutted by the bill of lading or other facts showing that someone else holds the beneficial interest in the goods. O’Boyle Tank Lines, Inc. v. Beckham, 616 F.2d 207 (5th Cir. 1980). For intrastate shipments, the same case says state law governs.
• The Fifth Circuit has also held that typing “Send Freight Bill To” and a third party’s name on the bills of lading did not, on the facts of that case, shift payment responsibility away from the shipper, and it rejected an estoppel defense. The appeal came from a Texas federal court, and the court called the Supreme Court’s Southern Pacific decision “essentially dispositive.” Missouri Pacific Railroad Co. v. Center Plains Industries, Inc., 720 F.2d 818 (5th Cir. 1983) (per curiam).
• A shipper that prepared and signed the bills of lading naming itself “shipper,” and did not sign the non-recourse disclaimer, was held to be the consignor and liable. Bestway Systems, Inc. v. Gulf Forge Co., 100 F.3d 31 (5th Cir. 1996).

When the Shipper Is Not Responsible

The presumption can be defeated. Courts have ruled for shippers in three kinds of situations.

The shipper had no part in the arrangement

In Thunderbird Motor Freight Lines v. Seaman Timber Co. (11th Cir. 1984), a lumber buyer chose the carrier and made every arrangement. The seller, whose yard the carrier picked up from, never dealt with the carrier and was never presented with the bills of lading. The carrier could not collect from the seller.

The shipper signed the non-recourse clause

In O’Boyle, a shipper that had executed no-recourse provisions in the bills of lading was dismissed from the case.

A note on current forms. These cases interpret bills of lading that had a signable non-recourse box. The National Motor Freight Traffic Association’s revised Uniform Straight Bill of Lading terms (published 2022) no longer include it. Section 7(a) says the consignor, consignee or shipper is liable for the freight and other lawful charges, and Section 8(a) says no agent of the shipper or other third party can waive or vary the bill’s terms unless the shipper and the carrier specifically authorize or ratify it in writing. Those terms apply only to carriers that participate in the National Motor Freight Classification, and many carriers, brokers and shippers use their own bills of lading or contracts, some of which still carry a no-recourse statement. Read the form actually used on the load, and confirm which version of the terms was in force on the ship date.

The carrier signed away its rights

In C.A.R. Transportation Brokerage Co. v. Darden Restaurants, Inc. (9th Cir. 2000), the carriers’ drivers signed “Waiver of Claim by Subcontractor” forms saying the carrier would not seek payment from the shipper or its customer. The shipper had already paid the broker, which then went bankrupt. The court held the parties were free to contract around the bill of lading’s default terms and that the waivers were valid, including because the drivers had apparent authority to sign them.

A Broker in the Middle Does Not Let the Shipper Off

In Oak Harbor Freight Lines v. Sears Roebuck & Co. (9th Cir. 2008), a shipper hired a broker, and the broker did not pay the carrier. The Ninth Circuit held the shipper still owed the carrier:

• The carrier’s contract with the broker did not change the shipper’s liability. That contract said nothing about the shipper not having to pay or the carrier not seeking payment from the shipper, and the court said it knew of no authority that a carrier-broker contract can modify a bill of lading’s default terms. Reading it to release the shipper would let a shipper “insulate itself from liability” just by using a broker.
• The shipper had paid part of the charges to the broker, but that did not bar the carrier from collecting from the shipper. The court said a shipper protects itself by dealing with a reputable broker, by contracting with the carrier to eliminate its liability, or by paying the carrier directly.

Courts are not uniform on the double-payment point, but the main appellate line favors the carrier. The Fifth Circuit held in Strachan Shipping Co. v. Dresser Industries, Inc. (5th Cir. 1983), an ocean-shipping case that also rested on a conference credit agreement, that a shipper that paid its forwarder stayed liable unless the carrier intended to release it and look only to the forwarder, judged from all the circumstances. The Eleventh Circuit adopted that rule in National Shipping Co. of Saudi Arabia v. Omni Lines, Inc. (11th Cir. 1997), and the Fourth Circuit adopted it in Hawkspere Shipping Co. v. Intamex, S.A. (4th Cir. 2003), which says outright that the circuits are split and calls this the “assumption of risk” approach: a shipper that chooses to pay a middleman instead of the carrier bears the risk that the middleman will not pass the money on. Strachan, National Shipping and Hawkspere all involved ocean freight and a forwarder or cargo consolidator, not a trucking broker, so they are persuasive on a trucking load rather than controlling; Oak Harbor, a trucking case, cites them. The other approach, which Hawkspere calls equitable estoppel, lets the shipper off when the carrier led it to believe that paying the middleman would settle the bill. The Sixth Circuit applied it in Olson Distributing Systems v. Glasurit America (6th Cir. 1988), on its facts: the carrier’s own paperwork said to bill the forwarder, it waited two to three months after the last delivery to send its bills to the forwarder and at least three months to tell the shipper the forwarder had not paid, and estoppel barred its claim. Oak Harbor distinguished Olson on its facts and called it an outlier. The Sixth Circuit later held a shipper liable after it paid its forwarder in Contship Containerlines, Inc. v. Howard Industries, Inc. (6th Cir. 2002), another ocean-freight case, on a quasi-contract theory: the shipper had delivered its goods straight to the carrier’s vessels, the bills of lading were unsigned, and the court said the shipper’s payments to the forwarder were made at its own risk. Hawkspere also lists the Eighth Circuit’s 1986 decision in Inman Freight Systems, Inc. v. Olin Corp. on the estoppel side, but Inman was a different kind of case: a carrier’s bankruptcy trustee suing the consignee for undercharges after the shipper had prepaid and signed a non-recourse clause. The court said a carrier can be estopped when a party relied on the carrier’s misrepresentation and would otherwise pay twice, found no estoppel because the full charges had not been paid, and followed the Fifth Circuit’s O’Boyle non-recourse rule.

For carriers: the facts that mattered in Olson were the carrier’s own conduct, its documents and its delay. Bill promptly, and tell the shipper right away if a broker stops paying.

One statement in Oak Harbor has drawn pushback. In Reveille Trucking, Inc. v. Lear Corp. (S.D. Tex. 2017), a federal district court in Houston agreed with a Michigan federal court in a parallel case and declined to read Oak Harbor as barring a carrier-broker contract from waiving the carrier’s claim against the shipper. The court said it could not see why a carrier’s waiver should work only if it is in a contract with a party to the bill of lading, found Darden closer to the facts, and held the carrier’s agreement with the broker could waive its right to recover from the shipper if that agreement is enforceable. It denied summary judgment because fact questions remained about enforceability. The Michigan case it followed, Drive Logistics Ltd. v. PBP Logistics LLC (E.D. Mich. 2017), ended with summary judgment for the shipper: the carrier was bound by the waiver in its broker agreement, signed by a planning administrator, because the broker could reasonably believe that employee had authority, and Michigan contract law governed. Both are district court decisions and do not bind other courts.

A federal court in Alabama reached the opposite result on different paperwork. In In re USA Motor Express, Inc. (J & P Trucking, Inc. v. USA Motor Express, Inc.) (N.D. Ala. 2007), the carriers’ brokerage agreements appointed the broker their agent for accepting payment and collecting charges, and the shipper’s contract with the broker said that paying the broker counted as paying the carriers. The shipper had paid the broker, which then went bankrupt. The court recognized that, with no other contract, a consignor is liable unless the bill’s non-recourse provision is signed, but held that the two contracts controlled, that the shipper did not have to pay again, and that the carriers’ claim lay against the broker. It is a district court decision, and Alabama is in the Eleventh Circuit, where National Shipping is the leading appellate decision.

The result can be different when a carrier cannot show the shipper was part of the deal. In Universal Truckload, Inc. v. Dalton Logistics, Inc. (5th Cir. 2020), a carrier hired by a Texas broker was not paid about $1.9 million. It sued the broker and the shippers whose freight it carried and could not collect from the shippers: a jury found no contract with one of them, and as to the other the carrier could not show it knew of, received or agreed to a shipping contract or any bill of lading. The court applied North Dakota law, not federal statute, and affirmed.

Takeaway: whether a shipper pays turns on what each party signed, who chose whom, and which state’s law applies. Cases come out both ways.

Court Decisions at a Glance

What Federal Law Says About Shipper and Consignee Liability

49 U.S.C. § 13706 sets out liability for freight rates between the shipper (or consignor) and the consignee on motor-carrier shipments.

• A consignee that is only an agent with no ownership of the goods is liable only for rates billed at delivery, and only if it gives the delivering carrier written notice before delivery that it is an agent without ownership (and, if the shipment is reconsigned or diverted, the name and address of the beneficial owner).
• When that applies, the shipper or consignor, or the beneficial owner if the shipment was reconsigned or diverted, is liable for additional rates “regardless of the bill of lading or contract.”
• A consignee that gives the carrier wrong information about who the beneficial owner is becomes liable for the additional rates.

Paperwork Decides Most Disputes

Before a dispute starts, collect and keep:

• the signed rate confirmation or carrier agreement, and the broker agreement if there is one
• every bill of lading, with who is named as shipper and consignee and whether a non-recourse clause or statement is signed (the NMFTA’s 2022 form no longer has the box)
• proof of delivery signed by the receiver
• the invoice, the date it was sent and any payment terms
• every message where the rate, route or extra charges were agreed
• any waiver or release your driver or dispatcher signed. Darden shows a waiver signed at pickup can end the carrier’s claim against the shipper.
• any clause in a carrier agreement or broker agreement saying you will look only to the broker for payment or waiving claims against the broker’s customers. In Reveille, a federal court in Texas held a clause like that can bar a carrier’s claim against the shipper if the agreement is enforceable, and in USA Motor Express a federal court in Alabama held that a shipper that paid the broker did not have to pay again where the carriers’ agreements made the broker their agent to accept payment.

A contract can also change federal defaults. Under 49 U.S.C. § 14101(b), a carrier and shipper may, in a signed writing, expressly waive rights and remedies under that part of the statute for the transportation the contract covers. They cannot waive the registration, insurance or safety-fitness requirements. Read the contract before relying on any default rule.

The 18-Month Deadline for Carriers

A carrier suing to recover charges for transportation it provided must begin the civil action within 18 months after the claim accrues, and a freight claim accrues on delivery or tender of delivery (49 U.S.C. § 14705(a), (g)).

That deadline is written for carriers. The statute’s text does not say how it applies to a broker pursuing its fee, and it is not a reason to wait. Count from the delivery date and act well before the end.

Freight Broker Bond: How to Claim When the Broker Does Not Pay

Federal law requires every registered freight broker to keep $75,000 of financial security, either a surety bond or a trust fund, on file with FMCSA. FMCSA will not register a broker without it (49 U.S.C. § 13906(b)(3); 49 C.F.R. § 387.307).

That freight broker bond is available to pay a claim against the broker for failure to pay freight charges under its contracts or arrangements when:

1. the broker consents to the payment;
2. the broker does not respond to adequate notice and the surety finds the claim valid; or
3. the claim is not resolved within a reasonable time after a reasonable attempt to resolve it, and it has been reduced to a judgment against the broker.

What to know about a bond claim

• The surety must respond within 30 days of a claim notice and, if it denies the claim, must give the grounds in writing. In a suit against the surety on such a claim, the prevailing party recovers its reasonable costs and attorney’s fees.
• If the broker fails or becomes insolvent, the surety must advertise for claims for 60 days from FMCSA’s published notice, then pay uncontested claims within 30 days after that, or a pro rata share if claims exceed the bond.
• The total is capped at $75,000 and shared by every claimant, so the bond may not cover every claim in full.
• A broker’s bankruptcy filing alone is not treated as “financial failure or insolvency” under the FMCSA rule.
• Outside the 60-day window after an insolvency notice, the statute and the rule do not state a filing deadline for a bond claim. Do not assume there is none; act promptly.

Practical steps

1. Confirm the broker is registered and identify its surety or trust holder from FMCSA’s records.
2. Send the claim to the surety in writing with the freight bills and proof of delivery.
3. Calendar the surety’s 30-day response date.
4. Watch the FMCSA Register for a cancellation notice, which opens the 60-day window.

What This Guide Does Not Cover

Cargo loss and damage claims, which follow different rules; household goods; and the specific terms of your contract. State law matters on intrastate loads and in cases like Universal Truckload. Oklahoma’s common-carrier statute, for example, presumes the consignor liable for the freight charges unless its contract with the carrier says the consignee will pay and the carrier lets the consignee take the freight (13 O.S. § 112), and makes a consignee liable if it accepts the freight knowing the consignor intended it to pay (§ 113). This guide did not find a Tenth Circuit decision, or a recent Eighth Circuit decision, squarely deciding whether a shipper that paid its broker must pay the carrier again, so federal courts in Oklahoma, Colorado, Missouri and Minnesota may not follow the rules described here. If a large unpaid balance is at stake, speak with a transportation attorney.

How Southwest Recovery Services Helps

Southwest Recovery Services recovers unpaid freight invoices for carriers and brokers on a contingency basis. At Southwest Recovery Services the contingency fee can range between 10% and 50%, depending on the age of the receivable and the amount of the receivable. If nothing is recovered, there is no fee. Related guides: trucking and transportation collections and accounts receivable management.

Request a Quote for Your Unpaid Freight Invoices

Frequently Asked Questions (FAQs)

Who is responsible for unpaid freight charges?

It depends on the paperwork and the parties. On interstate shipments, courts start by presuming the shipper is primarily responsible to the carrier, unless the bill of lading, a signed non-recourse clause, a contract or a waiver says otherwise. A consignee can also be liable, and for a broker-arranged load the broker owes the carrier under its own agreement.

Can I collect from the shipper if the broker did not pay me?

Often, but not always. One federal appeals court held a shipper liable to the carrier even though the shipper had paid its broker. Other courts ruled for the shipper when the carrier could not show the shipper was part of the deal or had received the paperwork, and a waiver signed by a carrier’s driver ended one carrier’s claim.

How long do I have to sue for unpaid freight charges?

A carrier must begin a civil action to recover its charges within 18 months after the claim accrues, and a freight claim accrues on delivery or tender of delivery (49 U.S.C. § 14705). That deadline is written for carriers. Count from the delivery date and act well before the end.

Does the freight broker bond cover my unpaid invoice?

It can. Every registered freight broker must keep $75,000 of financial security on file with FMCSA, and that security is available to pay claims arising from the broker’s failure to pay freight charges, under the conditions in 49 U.S.C. § 13906(b). The total is shared by every claimant, so it may not cover every claim in full.

How do I make a claim on a freight broker’s bond?

Confirm the broker is registered and identify its surety or trust holder from FMCSA’s records. Send the claim in writing with the freight bills and proof of delivery. The surety must respond within 30 days and, if it denies the claim, must give its grounds in writing.

What if the freight broker went out of business?

If a registered broker fails or becomes insolvent, the surety must advertise for claims for 60 days from FMCSA’s published notice, then pay uncontested claims within 30 days after that, or a pro rata share if claims exceed the bond. File a written claim inside that window.

Is there a deadline to claim on a broker’s bond?

The statute and the FMCSA rule do not state a filing deadline for a bond claim, other than the 60-day claims window after FMCSA publishes notice of a broker’s insolvency cancellation. Do not assume there is no deadline. Act promptly and ask a transportation attorney about your situation.

Should drivers sign waivers or releases?

Treat any waiver as a legal document. In one Ninth Circuit case, waivers signed by carriers’ drivers at pickup were enforced against the carriers, and the carriers could not collect from the shipper.

Related Reading on Trucking and Freight Collections

• Freight collection agency: cost and process explained
• Trucking debt collection: when to hire professional collectors
• Best collection agencies for freight brokers
• Logistics debt collection: top strategies and agencies

Learn More About Southwest Recovery Services →

Methodology and sources: This guide summarizes the statutes and court decisions linked above, each read in full from the official or court record in November 2026: 49 U.S.C. § 13706, § 14705, § 14101, § 13906 (U.S. Code, 2024 edition, GovInfo) and 49 C.F.R. § 387.307 (eCFR, current through its November 5, 2026 issue). Court decisions are linked to the opinion text on CourtListener, Justia, OpenJurist or the court’s own site. In November 2026 the seven main appellate decisions (Southern Pacific, O’Boyle, Bestway, Thunderbird, Oak Harbor, Darden and Universal Truckload) were also screened for later opinions that reversed, overruled, abrogated or criticized them, using CourtListener’s citation records and a government-law search of court opinions. None was reversed or overruled in the opinions reviewed. One point in Oak Harbor, described above, has been questioned by two federal district courts. That screen is not a substitute for a commercial citator such as KeyCite or Shepard’s. Case law changes; confirm that a decision is still good law before relying on it.

This is general information, not legal advice. Southwest Recovery Services is a collection agency, not a law firm. Rules differ by shipment, state and contract. Reviewed November 2026.

*Note: Recovery rates mentioned are for general reference only and not guaranteed. Actual results vary by account and industry. Contact Southwest Recovery Services for a customized quote.