Lesson 1: How money and paper flow in freight

What you will be able to do after this lesson

• Trace a load from the shipper's order to the carrier's payment.
• Name the documents and the people involved at each step.
• Explain who pays whom, and why payment takes weeks.
• Understand where back-office work adds value (and where errors cost money).

This course does not promise a job, income or clients. It teaches the skills used in logistics back-office work. Job availability, pay and remote options vary and change. Verify everything for your own situation.

1. The players

Back-office staff can work for a carrier, a broker, a dispatch service, a factor or as an independent contractor.

2. A load from start to finish

1. Order. The shipper tells a broker (or carrier) it has freight.
2. Quote and booking. Rate agreed. A rate confirmation is issued.
3. Carrier set-up. If the carrier is new to the broker, the carrier packet is checked.
4. Dispatch. The carrier assigns a driver and truck.
5. Pickup. Driver loads, checks the freight, signs the bill of lading (BOL).
6. Transit. Check calls, tracking, problems solved.
7. Delivery. Receiver signs; the proof of delivery (POD) is created.
8. Invoice. The carrier sends the invoice with POD and rate confirmation to the broker (or factor).
9. Broker bills the shipper. The broker invoices the shipper with its own margin.
10. Payment. Shipper pays broker; broker pays carrier (or factor).
11. Settlement. The carrier pays its driver and bills any extras.

Each step creates documents. Missing or wrong documents delay payment.

3. The documents that matter

4. Where time is lost

A careful back office prevents these at the source: right documents, right numbers, right timing.

5. Terms to know

• Net 30: payment due 30 days after the invoice date (or after the broker receives the paperwork; check the contract).
• Quick pay: payment earlier for a discount.
• Factoring: selling invoices for faster cash.
• Accessorials: extra charges such as detention or lumper.
• TONU: truck ordered, not used.
• Remit to: where payment should be sent.
• Aging: how long an invoice has been unpaid (current, 30, 60, 90 days).

6. A first look at the work

Typical daily tasks:

• Check delivered loads and collect missing paperwork.
• Build invoice packages and send them.
• Record payments received and match them to invoices.
• Follow up on unpaid invoices.
• Update carrier or driver files and reminders.
• Answer questions from drivers, brokers and customers.
• Report numbers to the owner or manager.

Key terms

• BOL, POD, rate confirmation, invoice package, aging, remit-to, factor.

Check your understanding

1. List the order of documents from booking to payment.
2. Name three reasons an invoice may be rejected.
3. What does "aging" tell you?
4. Who might a back-office worker be employed by?

Answers: (1) Rate confirmation, BOL, POD, invoice package, payment, driver settlement. (2) Any three of missing POD, wrong load number, wrong amount, missing rate confirmation, wrong remit-to or billing address. (3) How long invoices have been unpaid. (4) A carrier, broker, dispatch service, factor, or as an independent contractor.