Payment Terms in Transportation and Logistics

Net 30 from invoice receipt is the trucking-industry default for established broker and shipper relationships. Many independent owner-operators and small fleets factor invoices instead — selling receivables to a factoring company at a 2–5% discount for same-day or next-day cash. New carrier-broker relationships often run on Net 15 or even Net 10 until trust is established. Quick-pay programs (1–3% discount for fast pay) are common from larger brokers who want to incentivize carriers to keep using them.

A factoring company buys the carrier's receivables (the invoiced load) at a discount — typically 2–5% — and pays the carrier within 24 hours. The factor then collects from the broker or shipper at the standard Net 30 cycle. The carrier gets cash to cover fuel, insurance, and driver pay; the factor takes the float risk. Factoring is heavily used in trucking because the cycle from load delivery to broker payment is long and trucking has high working-capital needs (fuel, maintenance, insurance). Estimates suggest 40%+ of trucking AR is factored, though the exact share varies. Factoring agreements have specific terms about recourse vs non-recourse, advance rates, and fee schedules.

Larger freight brokers (Convoy, Loadsmart, JB Hunt, etc.) offer quick-pay options where carriers can opt for faster payment in exchange for a small discount — typically 1–3% off the load amount, paid within 1–3 business days instead of Net 30. Quick pay is the broker's middle path between Net 30 (which discourages carriers from accepting their loads) and factoring (which the carrier pays for separately). For carriers, quick pay is often cheaper than factoring (1–3% vs 2–5%) and doesn't require setting up a factoring relationship.

Fuel surcharge is a separately-billed charge that adjusts for diesel price volatility. Rate confirmations typically list a base rate plus a fuel surcharge tied to a published diesel price index (often the DOE's weekly average diesel price). The surcharge changes weekly as diesel prices change, so a load booked at $1,500 + fuel surcharge might invoice at $1,500 + $300 surcharge if diesel was high that week. Putting the fuel surcharge as a separate line item rather than baking it into the line haul rate makes the math transparent and allows for the weekly adjustment.

Detention charges apply when the carrier waits at a shipper or receiver beyond the contracted free time (typically 2 hours at pickup, 2 hours at delivery). Detention is billed at an hourly rate, typically $50–$75/hour. Accessorial charges cover services beyond the basic line haul — driver assist, lumpers, layovers, multi-stop, oversized loads, etc. — each as its own line on the invoice. These charges are common dispute points; the supporting documentation (signed bills of lading, signed detention timesheets) matters more than the math.

International freight (ocean and air) typically runs on prepayment or letter of credit terms — the freight forwarder collects from the shipper before booking the cargo with the ocean carrier or airline. Domestic freight (truckload, LTL, intermodal) runs on Net 30 broker payment cycles. Cross-border North American truckload (US-Canada, US-Mexico) uses domestic Net 30 patterns. The international freight forwarder's invoice to the shipper often consolidates ocean freight, customs clearance, and last-mile delivery into a single invoice with separately-itemized charges.

Per-diem charges apply to container leasing — when a shipper or trucker holds an ocean container beyond the contracted free time (typically 4 days at port). Demurrage is the same concept at the port itself — fees charged by the terminal for containers that aren't picked up within the free time. Both are billed per-day per-container and add up quickly: $100–$200/day per container is common, with rates escalating after the first few days. These charges produce significant disputes; the resolution usually involves carefully reconstructing the timeline of where the container was each day and whose fault any delays were.