If you are already in the freight brokering business, then you know how important it is to get rate confirmations from your carriers. But if your just looking into becoming a freight broker, you may be wondering – what is a rate confirmation, and why is it so important?
A rate confirmation is a document that confirms the rates that have been agreed upon between two parties. Brokers use rate confirmations to protect themselves from being charged more than they expected for shipping services, and to ensure that they are getting the the services that have been agreed upon from the motor carrier. In today’s article, we will discuss the importance of rate confirmations and explain how you use them to protect your freight brokerage when moving freight with the use a contracted motor carrier.
What Should A Rate Confirmation Include
Rate confirmations should include the rate that is being charged for a shipment, starting and ending dates of service, shipping details (such as carrier name, consignor name, consignee name, delivery address, etc…), and commodity details or rate classifications (if any) in accordance with industry standards. It also includes an itemized detail of charges such as fuel surcharges or accessorial charges to be paid by the freight forwarder or the shipper.
Why Are Rate Confirmations Important
Rate confirmations are a vital part of rate negotiations, as they help brokers make an informed decision when selecting carriers for their client’s shipments. By having a rate confirmation signed by the carrier and on file, freight brokers can be sure that they are protected if any issues are to arise from a shipment.
If you’re looking for a rate confirmation template, we’ve got you covered. Check out our rate confirmation template, as well as many of the other important documents that new freight brokers will need to kick off their business.
Why Use A Rate Confirmation
So, why should you use a rate confirmation? Well there are several reasons. And they all have to do with protecting yourself and your freight broker business.
First of all, using rate confirmations ensures that the motor carrier and the freight broker are on the same page about what is expected of a shipment. It’s just as much a safety measure as it is instructions to the motor carrier about what is required for carrying the shipment.
The rate confirmation lays out the terms of any freight shipment. These can include specifics about delivery, payment and other details regarding the shipment, delivery, or commodity.
Secondly, rate confirmations protect both you and your motor carrier partners from disputes later on down the road when it comes to paying for or charging for freight shipping services. That’s especially true in the case of disagreements about rate quotes that have been given and accepted.
Finally, rate confirmations provide a documented trail of all communication between freight brokers and motor carriers relating to a specific shipment. This can come in handy if there’s ever any question later on about what was agreed upon – or even if one party tries to back out of an agreement.
A rate confirmation is an essential part of doing business as a freight broker. It protects you, your partners, and your bottom line. So make sure to use them in all of your transactions that require hiring a motor carrier to move freight.