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With Department of Justice (DOJ) approval, ATA has released its long-awaited model agreements for structuring motor carrier and broker contractual relationships. On Aug. 10, 2006, the DOJ issued what is referred to as a business review letter that stated it had no present intention of challenging the ATA proposal to develop and publicize model carrier/broker agreements. That language signals the government’s position that the creation, distribution and use of the model agreements does not raise antitrust concerns.
The model agreements-- a short and a long version-- along with instructions for their use, may be found at the bottom of this page. The model contracts were developed in consultation with ATA member motor carriers, many of which operate separate brokerage businesses, and reflect comments made by the Transportation Intermediaries Association (TIA) on behalf of its members. The model agreements are intended to assist motor carriers and brokers in reaching a common understanding of their legal rights and obligations and to cover basic contractual terms, such as the legal status of the parties; freight documentation; insurance coverage; and cargo liability. The provisions of the model agreement are designed to provide a neutral starting point for carrier/broker negotiations and their use is entirely voluntary in nature. All provisions related to rates, charges and other competitively sensitive matters are left blank and must be completed via individual negotiations. Recognizing that a lengthy contract is not appropriate for the spot market environment, the two-page short form model incorporates much of the longer form by reference and provides a user-friendly contract for carriers and brokers engaged in one-time or limited business transactions. The ATA model contracts follow the release earlier this summer of a TIA-developed model motor carrier/broker agreement. ATA has previously cautioned its members that it believes that the TIA model, which has not undergone DOJ antitrust review, favors in many instances the interests of brokers and shippers over that of motor carriers. For example, the TIA model asks motor carriers to agree that the broker “is the sole party responsible for payment of carrier’s charges” and contains an absolute prohibition against motor carriers seeking payment of freight charges from a shipper that has paid a broker. The ATA model agreements leave this sensitive “shipper recourse” issue to the negotiations of the parties. Motor carriers should carefully distinguish between the TIA and ATA models when negotiating and drafting individual carrier/broker agreements. Source: Press Release
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