Factoring is a financial service where a third party (OperFi) purchases your invoices, providing immediate cash flow instead of waiting for customer payments. This helps cover operating expenses, pay carriers faster, and maintain business liquidity.

Before doing business with a customer, it’s critical to protect yourself contractually. You should always have one of the following in place:

• Master Service Agreement (MSA) – A legally binding contract that outlines responsibilities and terms.
• Broker/Shipper Agreement – Defines the relationship and expectations between you and the shipper.
• Customer Setup Packet – Covers key details such as payment terms, dispute resolution, and liability.
• Purchase Orders (POs) – Used to solidify contractual rights on a project basis.

Submit a credit check request for any new customer before booking a load with them. This ensures the customer has been evaluated for creditworthiness and reduces the risk of non-payment.

If a customer is not approved, they may be asked to complete a credit application to provide more details about their financial stability. In some cases, a lower credit limit may be assigned instead of outright denial.

Fraud is a growing problem in the logistics industry. Brokers should be cautious of:

• Customer Fraud – Scammers posing as legitimate shippers to steal freight.
• Agent Fraud – Fake “freight agents” applying for jobs via broker websites, only to scam them.
• Carrier Fraud – Double brokering, identity theft, and unauthorized carrier substitutions.

• Verify MC/DOT number history—look for red flags like frequent address changes.
• Check IP addresses—VPN use may indicate fraudulent carriers.
• Confirm carrier identity directly with FMCSA and CarrierOK.
• Strictly enforce compliance—no Rate Confirmations until verification is complete.

? Best Practice: Follow strict customer setup protocols to avoid fraud before onboarding any new clients.

The Carmack Amendment (49 U.S.C. § 14706) governs liability for freight loss or damage in interstate commerce. While carriers bear the primary responsibility, brokers have obligations in the event of a claim.

• Ensure a Broker-Carrier Agreement is signed—this protects your brokerage from undue liability.
• Do not pay a carrier without investigating the claim—work with the shipper and the carrier to determine the proper resolution.
• Assist in claims processing—collect necessary documentation and coordinate with insurers if needed.
• Maintain thorough records—including rate confirmations, BOLs, and any carrier communications.

• Ensure the carrier’s insurance is active.
• Do not pay the carrier until the claim is resolved.
• Assist your customer in submitting a claim.

? DO NOT pay any carriers until the rightful one is identified.

• Confirm who actually moved the load.
• Wait for the legitimate carrier to surface.
• Update payment details and contract terms accordingly.

? Tip: This is why it’s critical to have a signed Broker-Carrier Agreement—without it, your brokerage is at serious risk.

1. Send the carrier the Vendor Setup Link (Carrier Onboarding).
2. The carrier must complete:
   • Broker-Carrier Agreement
   • Carrier Profile Submission
   • Compliance Check (FMCSA, Highway, IP Address review)
   • Insurance Certificate submission (COI listing your brokerage as a certificate holder)
   • Factoring Company Information (if applicable)
3. Once approved, the carrier can be booked for loads.

1. Enter the load details into your TMS system.
2. Post loads to load boards (if applicable) or assign them to a carrier.
3. Confirm the carrier has completed onboarding and compliance checks.
4. Send Rate Confirmation and obtain carrier approval before dispatch.