An authoritative reference of freight brokerage terminology — from domestic operations through cross-border logistics. Definitions are specific and operational, not marketing copy.
A
Agente Aduanal A licensed Mexican customs broker (agente aduanal) is required by Mexican law to clear every commercial shipment entering or leaving Mexico. The agente aduanal files the pedimento, classifies goods under the HTSUS/tariff schedule, calculates duties and taxes, and coordinates with Mexican customs (Servicio de Administración Tributaria — SAT). They are legally indispensable for US-Mexico cross-border freight; no shipment clears Mexican customs without one.
Authority (MC/DOT) Operating authority issued by the FMCSA allowing a company to transport freight for hire in interstate commerce. Carriers require a Motor Carrier (MC) number issued by FMCSA. Freight brokers require a separate broker authority (also an MC number, distinguished by the property broker designation). The DOT number is the federal identifier used for safety oversight and inspection records. Both are searchable on the FMCSA SAFER system.
B
Bill of Lading (BOL) The foundational document in freight transportation — a legal contract between the shipper and the carrier specifying what is being shipped, from where, to where, and under what conditions. The BOL serves as a receipt of goods, a contract of carriage, and (in some cases) a document of title. Straight BOLs are non-negotiable; order BOLs are negotiable instruments used in international trade finance.
Blind Shipment A shipment where the carrier's documents (BOL, rate confirmation) are structured so that neither the shipper nor the consignee can identify the other party — typically used when brokers or distributors want to prevent direct carrier/customer relationships from forming, or when a shipper doesn't want a consignee to know the origin of goods.
Brokerage Margin / Spread The difference between the amount a broker bills a shipper and the amount the broker pays the carrier for the same load. Gross margin across the brokerage industry typically ranges from 12–18% of shipper-billed freight charges, though it varies significantly by lane, market conditions, and service complexity. This spread is the subject of the FMCSA's broker transaction records rulemaking.
C
CAAT (Canadian Association of Air Transport) Canada's national air transport industry association. Less directly relevant to surface freight brokers, but relevant in contexts involving intermodal shipments with air components or integrated logistics planning in Canada.
Cargo Claim A formal claim filed by a shipper or consignee against a carrier for loss or damage to freight. Under the Carmack Amendment (49 U.S.C. § 14706), carriers are liable for actual loss of or damage to property. Freight brokers are generally not liable for cargo claims under Carmack, though contractual language in shipper agreements sometimes attempts to assign broker liability. Best practice is to ensure carrier cargo insurance limits are adequate before booking.
Carrier A company licensed by the FMCSA to transport goods for hire. Asset carriers own or lease the trucks and employ (or contract) the drivers. In brokerage context, carriers are the supply side of the marketplace — the entities executing physical movement of freight in exchange for the rate the broker negotiates.
Carrier Packet The set of documents a broker collects from a new carrier before booking their first load: W-9, certificate of insurance (naming the broker as additional insured), signed carrier agreement, and FMCSA authority documentation. Most brokers now use automated onboarding platforms (RMIS, MyCarrierPackets, Highway) rather than collecting these manually.
CBSA (Canada Border Services Agency) Canada's federal agency responsible for border services, customs enforcement, and immigration at Canadian ports of entry. Equivalent to US Customs and Border Protection (CBP) for Canadian inbound and outbound shipments. Freight entering Canada requires CBSA clearance; the PARS/PAPS system is the pre-arrival release mechanism.
CTPAT (Customs-Trade Partnership Against Terrorism) A voluntary supply chain security program administered by US Customs and Border Protection. CTPAT-certified carriers, brokers, and importers have demonstrated their supply chain security practices meet CBP standards. CTPAT certification provides expedited border processing and reduced inspection rates. For US-Mexico cross-border freight, many enterprise shippers require their carriers to be CTPAT certified.
Customs Broker A licensed professional (licensed by CBP in the US; by CBSA in Canada) authorized to file customs entries on behalf of importers. Distinct from a freight broker: customs brokers handle regulatory documentation, duties, and customs clearance. Many freight brokerages partner with customs brokers or offer customs brokerage services. In Mexico, the equivalent is the agente aduanal.
D
DAT DAT Solutions is the largest freight marketplace in North America for spot truckload freight. DAT operates load boards where carriers post truck availability and brokers/shippers post load opportunities. DAT RateView is their market rate intelligence product, widely used as the industry benchmark for spot lane rates. Most freight brokers active in dry van and LTL spot markets subscribe to DAT.
Deadhead Miles driven by a truck without freight (empty). Also called "empty miles." Carriers try to minimize deadhead by positioning their trucks near the next load's origin. High deadhead rates increase carrier costs and reduce profitability. Brokers who understand a carrier's typical routes can offer backhaul loads that fill empty return trips, creating value for both parties.
Detention A fee charged when a carrier's truck is held at a shipper or receiver location beyond the free time specified in the rate confirmation. Standard free time is 1–2 hours for pickup and delivery; detention rates typically run $50–$75/hour. Detention disputes — over whether free time was exceeded and whether the driver documented it correctly — are among the most common conflicts between brokers, carriers, and shippers.
DODA (Declaración de Operación de Depósito Aduanero) A Mexican customs document used for bonded warehouse operations. Relevant for freight brokers managing cross-border shipments where goods are temporarily stored in a Mexican customs bonded facility (recinto fiscalizado) before customs clearance is completed.
Door-to-Door (D2D) A cross-border service type where the carrier moves freight the entire distance — from the US origin, across the border, and to the Mexican destination (or vice versa). D2D carriers on the US-Mexico corridor typically require bi-national operating authority: US MC authority and Mexican federal transport permit. Approximately 87% of US-Mexico cross-border freight moves D2D. The carrier pool is predominantly US-domiciled.
Double Brokering The unauthorized re-brokering of a load: a broker books a carrier, but instead of moving the freight themselves, that carrier (or entity) brokers it again to a third party — often without the original broker's or shipper's knowledge. Double brokering is a form of fraud when done deceptively. The TIA estimates that freight fraud including double brokering costs the industry $500–$700 million annually. Highway and other carrier vetting platforms specifically screen for patterns associated with double brokering.
Drayage Short-distance trucking movements, typically in port, rail yard, or intermodal terminal environments. A drayage carrier moves a container from a port to a nearby warehouse, or from a rail yard to a distribution center. Drayage is a specialized carrier niche distinct from over-the-road truckload.
Drop Trailer A service model where the carrier drops an empty trailer at the shipper's facility, the shipper loads at their own pace, and the carrier returns later to pick up the loaded trailer. Also called "drop and hook" when the driver drops one trailer and hooks a pre-loaded one. Drop trailer programs reduce shipper detention exposure and are often preferred by high-volume shippers.
E
EDI 204 / 210 / 214 Electronic Data Interchange transaction sets used in freight:
- EDI 204 — Motor Carrier Load Tender: the shipper's TMS sends a load offer to the broker or carrier's TMS
- EDI 210 — Motor Carrier Freight Details and Invoice: the carrier or broker sends an invoice to the shipper's accounts payable system
- EDI 214 — Shipment Status Message: the carrier or broker sends location and status updates back to the shipper's TMS throughout the load lifecycle
EDI is the primary technical standard for enterprise shipper-broker integrations and is required by most large shippers for formal carrier/broker programs.
F
Factoring Invoice factoring is a financing mechanism where a broker or carrier sells their outstanding invoices to a factoring company at a discount (typically 1.5–5% of invoice value) in exchange for immediate cash. Common in trucking and freight brokerage where shippers pay on 30–60 day terms but operators need cash for fuel, payroll, and operating costs. Factoring companies often perform credit checks on the broker's customers as part of their underwriting.
FMCSA (Federal Motor Carrier Safety Administration) The US Department of Transportation agency responsible for regulating commercial motor vehicle safety and the licensing of freight brokers and carriers. FMCSA maintains the SAFER system (Safety and Fitness Electronic Records), issues MC numbers, enforces hours-of-service regulations, and administers the broker authority and surety bond requirements.
Freight Broker A licensed intermediary (FMCSA-licensed, with a surety bond or trust fund) that arranges transportation of freight between shippers and carriers but does not take physical possession of the goods. Freight brokers earn revenue on the spread between what shippers pay and what carriers receive. As of 2024, approximately 28,000 licensed broker entities operate in the US. The TIA (Transportation Intermediaries Association) is the primary industry trade organization.
Freight Forwarder An entity that arranges international freight transportation and handles the associated documentation, customs clearance, and logistics coordination. Freight forwarders can operate as NVOCCs (Non-Vessel Operating Common Carriers) in ocean freight or as air freight agents. Distinct from domestic freight brokers in scope and regulatory framework, though many large logistics companies do both.
Fuel Surcharge (FSC) A variable charge added to base freight rates to account for fuel cost fluctuations. Calculated as a percentage of the base rate using a published index (typically the DOE weekly diesel average). The FSC is an industry-standard mechanism that allows base contract rates to remain stable while fuel cost variation is handled through the surcharge structure.
G
Gross Revenue vs. Net Revenue In freight brokerage, gross revenue (also called gross freight revenue or total revenue) is the total amount billed to shippers. Net revenue (also called net freight revenue or brokerage revenue) is the amount retained after paying carriers — the broker's gross margin. Most financial benchmarking in brokerage is done on net revenue. A brokerage doing $10M in gross revenue at 15% margins generates $1.5M in net revenue.
H
HOS (Hours of Service) Federal regulations (49 CFR Part 395) governing how many hours a commercial truck driver can drive and work in a given period. Key limits: 11 hours of driving in a 14-hour on-duty window, followed by a mandatory 10-hour off-duty period. 60-hour/7-day and 70-hour/8-day caps also apply. HOS violations are a significant carrier compliance issue; FMCSA enforcement can result in out-of-service orders. Brokers need to understand HOS constraints when scheduling pickup and delivery windows.
I
Intermodal Freight movement using more than one mode of transportation — most commonly a combination of truck and rail. The freight typically moves in a standardized container (53-foot or ISO) that transfers between modes without reloading the cargo. Intermodal is generally cheaper than over-the-road truckload for long-haul lanes (1,500+ miles) and more fuel-efficient. Drayage moves the container between rail ramps and the shipper/receiver facility.
L
LTL (Less-Than-Truckload) A shipping mode for freight that doesn't fill an entire truck. Multiple shippers' freight is consolidated into a single trailer by an LTL carrier, with each shipper paying for their portion of the capacity based on weight, dimensions, and freight class. LTL carriers operate hub-and-spoke terminal networks; transit times are generally longer than truckload. Major LTL carriers include FedEx Freight, Old Dominion, Estes, Saia, and XPO.
Lumper A third-party labor contractor at a warehouse or distribution center who unloads or loads freight from the truck. Lumper fees are charged by the facility and are typically the shipper's or consignee's responsibility, though they are sometimes absorbed by the carrier or broker depending on the rate negotiation. Lumper charges are a common source of surprises on accessorial invoices.
M
MC Number The Motor Carrier operating authority number issued by FMCSA. Carriers with MC authority are licensed to haul freight for hire in interstate commerce. Freight brokers also receive an MC number (as property brokers). MC numbers are searchable in the FMCSA SAFER system and are required verification elements when onboarding a new carrier.
N
Near-Shoring The relocation of manufacturing operations from distant locations (typically Asia) to nearby countries — specifically, in the North American context, the movement of manufacturing into Mexico to supply US consumers. Near-shoring has been a significant driver of growth in US-Mexico cross-border freight since 2022, accelerated by supply chain disruptions and US-China trade tensions. Major manufacturing investments in Monterrey, Saltillo, San Luis Potosí, and Querétaro have increased freight volume on all major Mexico-US corridors.
NMFC (National Motor Freight Classification) The industry classification system that assigns freight to classes (50–500) based on density, stowability, handling characteristics, and liability. NMFC class affects LTL pricing significantly. The National Motor Freight Traffic Association (NMFTA) maintains the classification schedule. Incorrect NMFC classification is a common source of freight invoice discrepancies (re-class charges).
O
OTR (Over-the-Road) Over-the-road trucking refers to long-haul or regional truckload freight where drivers travel significant distances, often away from home for multiple days at a time. OTR is the dominant mode in domestic truckload brokerage, distinct from local/regional operations and intermodal.
Out-of-Service (OOS) Rate The percentage of inspected commercial vehicles or drivers placed out-of-service during roadside safety inspections, as reported in FMCSA's Safety Measurement System (SMS). A carrier with a high OOS rate is a regulatory red flag. Industry threshold: vehicle OOS above 20.7% or driver OOS above 5.5% triggers FMCSA percentile scores that can affect carrier usability. Carrier compliance tools like RMIS monitor these scores continuously.
P
PARS/PAPS (Pre-Arrival Review System / Pre-Arrival Processing System) Canadian customs pre-clearance programs. PARS is used by most carriers crossing into Canada — the carrier/broker submits shipment documentation to CBSA before the truck arrives at the border, allowing customs to review and release the shipment electronically. PAPS is the older paper-based version, largely replaced by PARS in modern practice. Pre-clearance reduces border wait times significantly.
Pedimento The official Mexican customs declaration form required for all commercial imports and exports crossing the Mexican border. Filed by a licensed agente aduanal, the pedimento contains full shipment details, commodity classification, declared value, duty calculations, and compliance certifications. Each pedimento has a unique reference number used for tracking customs clearance status. There are different pedimento types for import (A1), export (A2), temporary import (TIN), and maquiladora operations.
PIP (Partners in Protection — Canada) Canada's voluntary supply chain security partnership program, administered by CBSA. Equivalent to CTPAT in the US context. PIP members demonstrate security practices that meet CBSA's standards, receiving benefits such as reduced examinations and expedited processing at the border. For US-Canada cross-border freight, PIP certification is increasingly requested by enterprise shippers as part of their carrier qualification requirements.
POD (Proof of Delivery) Documentation confirming that freight was delivered to the consignee. Typically the signed copy of the BOL, a signed delivery receipt, or an electronic confirmation captured by the driver's ELD/mobile app. POD is required to release payment in many shipper payment terms and is essential evidence in cargo claim disputes. Brokers should confirm POD receipt before releasing carrier payment, especially for high-value shipments.
R
Rate Confirmation The binding agreement between a freight broker and a carrier specifying the load details (origin, destination, pickup/delivery windows, commodity, equipment type) and the agreed-upon carrier rate. The rate confirmation is the contract that governs the broker-carrier relationship for a specific transaction. Rate confirmations typically include terms on accessorial charges, detention, fuel surcharge, and the carrier's agreement not to re-broker the load.
Reefer A refrigerated trailer used to transport temperature-sensitive freight — produce, meat, dairy, pharmaceuticals, and other perishables. Reefer freight commands higher rates than dry van due to equipment cost and the specialized driver/carrier pool. Reefer brokers are a distinct specialty niche within freight brokerage.
RMIS (Registry Monitoring Insurance Services) The leading carrier insurance and authority monitoring service in North American freight. RMIS continuously monitors carrier certificates of insurance, operating authority status, and safety scores — alerting brokers when anything changes (policy lapses, authority revocations, safety rating changes). RMIS is used by most mid-to-large freight brokers as a core carrier compliance infrastructure. Founded in 1994 and widely considered the industry standard.
S
Shipper of Record The entity legally responsible for a shipment — the company named on the BOL as the shipper. In standard direct shipping, this is the manufacturer or seller. In brokered freight, the shipper of record is typically the broker's customer (the shipper client), not the broker. The distinction matters for insurance, liability, and customs documentation.
Spot Market vs. Contract Market Spot market freight is tendered and priced transaction-by-transaction, reflecting current supply and demand conditions for capacity on a given lane and date. Contract market freight is covered by agreed-upon rates for a defined period (30–365 days), providing rate stability for shippers and volume commitment for carriers and brokers. Most large shippers use contract freight as their primary procurement mechanism and access the spot market for overflow volume. Spot rates are more volatile and can diverge significantly from contract rates during capacity crunches or market downturns.
Surety Bond The FMCSA requires freight brokers to maintain a $75,000 surety bond (Form BMC-84) or trust fund (Form BMC-85) as financial protection for carriers and shippers if the broker fails to pay claims. The bond was raised from $10,000 to $75,000 by the MAP-21 Act of 2013. Many smaller brokerages fail to maintain bond compliance, which is an immediate disqualifier for carrier relationships with compliance-focused carriers.
T
TIA (Transportation Intermediaries Association) The primary trade association for North American freight brokers and third-party logistics companies. TIA provides advocacy, education, carrier compliance tools (including TIA Watchdog for double brokering alerts), and industry standards development. TIA is the primary broker voice in FMCSA rulemaking processes, including the broker transaction records transparency rule.
TMS (Transportation Management System) Software used by freight brokers and shippers to manage freight operations — load tracking, carrier management, customer records, rate confirmations, invoicing, and reporting. For brokers, the TMS is the operational core of the business. Enterprise-level TMS platforms (McLeod, MercuryGate) support full EDI integration with shipper systems. Mid-market options include Tai TMS and Aljex. Entry-level options include AscendTMS and Rose Rocket.
U
USMCA/CUSMA (United States-Mexico-Canada Agreement) The trade agreement that replaced NAFTA in July 2020, governing trade between the US, Mexico, and Canada. USMCA/CUSMA affects freight through its rules of origin requirements (determining which goods qualify for preferential tariff treatment), labor provisions affecting automotive content, and updated customs procedures. Freight brokers handling cross-border shipments need a working understanding of USMCA rules of origin as it affects commodity documentation requirements. The agreement is called CUSMA (Canadian-United States-Mexico Agreement) in Canada and T-MEC in Mexico.
Last updated: March 2025. This glossary is maintained as a reference resource for freight brokers and logistics professionals.