1. SCOPE AND FIELD OF APPLICATION. These Terms and Conditions for Freight Broker Services by Harmonic Routes, LLC (“Terms”) are the only terms that govern the provision of Services, defined below, by Harmonic Routes, LLC (Broker) to any other party (shippers, brokers, or any other party, each hereafter described as “Shipper”) who engages Broker to arrange motor carrier transportation of Shipper’s freight. These Terms prevail over any terms and conditions of any invoice, billing statement, confirmation, receipt, bill of lading, contract, or any other document relating to any Services provided by Broker, regardless of whether or when Shipper has submitted its request for proposal, order, or such terms. Provision of Services to Shipper does not constitute acceptance of any of Shipper’s terms and conditions and does not serve to modify or amend these Terms. Broker’s provision of Services to Shipper is conditioned on Shipper’s acceptance without modification of these Terms, and Shipper’s engagement of Broker to provide Services constitutes Shipper’s agreement to all these Terms. Broker reserves the right to change these Terms at any time for any reason or no reason, with or without notice. Shipper and Broker may be referred to herein individually as a “Party” and collectively as the “Parties”.
2. SERVICE.
2.1. Broker agrees, as an independent contractor and a federally registered broker of property (MC#526599 ), to arrange motor carrier transportation of Shipper’s freight, when accepted by Broker, pursuant to these Terms and in compliance in all material respects with all federal, state and local laws and regulations relating to the brokerage of freight covered by these Terms (described throughout these Terms as the “Services”). Nothing in these Terms shall be deemed to require Broker to provide Services upon request of Shipper, and Broker reserves the right to accept or decline, in its sole discretion, any request for Services. Broker shall have exclusive control and direction of Broker’s personnel engaged in providing brokerage services hereunder and assumes full responsibility for their acts and omissions. The Parties recognize and agree that Broker is not a motor carrier, never takes possession of Shipper’s freight, does not maintain any control over the means and manner of delivery, and shall not itself perform the actual physical transportation of Shipper’s freight as a motor carrier.
2.2. Under no circumstances is Broker to be deemed a motor carrier. In the event Broker is identified as a motor carrier on any document, such designation shall be only for the convenience of Shipper or shall be deemed a mistake but in no event shall the designation have any legal impact or authority to change Broker’s status as a broker.
2.3. Broker shall arrange for the transportation of Shipper’s shipments with motor carriers of property that are currently and properly registered with the FMCSA and such State authorities having jurisdiction over their operations.
2.4. Broker shall not co-broker or permit any motor carrier utilized by Broker to interline, subcontract, sub-tender or engage another carrier, broker or person (collectively “Substitute Service”) to transport and deliver shipments tendered by Shipper hereunder.
2.5. In collaboration with Shipper, Broker shall develop performance reporting and provide access to the dealer portal in OVISS.
3. COMPENSATION.
3.1. For service provided under these Terms, Shipper shall pay the agreed upon freight rate and shall reimburse Broker for the agreed upon surcharges. Broker’s invoice shall cover Broker’s commission and all rates and charges of the motor carrier.
3.2. On the anniversary of each year of any contract between the Parties, the agreed upon freight rates will automatically increase by 2% per year.
3.3. For all rates and surcharges referenced above, Shipper agrees to pay or cause to be paid each properly-substantiated invoice within 15 days of receipt of invoice, unless Shipper in good faith disputes the invoice (in whole or in part), in which case Shipper may withhold payment of the disputed amount. In such case, the Parties shall promptly confer to resolve the dispute and no interest or late payment fee shall apply to the amount withheld by Shipper. However, if it is determined by a court that Shipper wrongfully withheld payment of invoice, interest shall accrue from the due date of the invoice through the date of payment in the amount of 1% per month.
3.4. Payment of the freight charges to Broker shall relieve Shipper, or other responsible party of any liability to the motor carrier for non-payment of its freight charges; and Broker hereby agrees to indemnify and hold harmless Shipper or other responsible party against such liability.
3.5. In order to protect Shipper and its customers from freight payment claims, Broker agrees that it shall promptly remit full payment to motor carriers providing transportation services, and shall keep and maintain records of all such payments.
4. FREIGHT OPERATIONS. Broker agrees that it shall have a current and effective written agreement with each of the motor carriers (“Motor Carrier(s)”) that Broker utilizes to transport freight tendered by Shipper. Broker further agrees that those contracts shall comply with applicable federal and state regulations and shall include the following provisions:
4.1. The Motor Carriers shall provide (a) proof of valid FMCSA operating authority, (b) certificates of insurance evidencing the coverage required below, and (c) proof that it does not have an “Unsatisfactory” safety rating as determined by the FMCSA. Further, the Motor Carriers shall agree that at no time during the term of its contract with Broker shall it have an “Unsatisfactory” safety rating and shall immediately notify Broker of any change in its safety rating.
4.2. The Motor Carriers shall agree to maintain at all times during the term of its contract, insurance coverage with limits not less than the following:
4.2.1 Motor vehicle liability insurance in an amount not less than $1 Million combined single limit for personal injury, including without limitation bodily injury and death, and property damage;
4.2.2 Cargo insurance that covers the value of the cargo during loading, transit, and unloading in the following amounts:
4.2.3 Workmen’s compensation insurance or occupational accident insurance in the amount required by applicable law. It shall be the duty of the Motor Carriers to ascertain and comply with legal requirements, if any, for workmen’s compensation and/or occupational accident insurance.
4.3. The Motor Carriers shall agree to comply with all federal and state laws, regulations, and rules applicable to its operations, including, without limitation, FMCSA regulations.
4.4. The Motor Carriers shall agree that its tariff, service guide, circular or other motor carrier documents shall not apply in any manner to services provided by the motor carrier under its contract, and shall agree to waive any and all rights to assert any lien, attachment or encumbrance against customer freight.
4.5. The Motor Carriers shall agree to defend, indemnify and hold Broker and Broker’s customers harmless from any and all claims and liability for losses and/or damages to property and/or injuries to persons occasioned wholly or in part by or resulting from any acts and/or omissions by Motor Carriers and/or Motor Carriers’ agents, servants, employees and/or representatives or for any cause or reason whatsoever arising out of, occasioned by or resulting from any motor vehicle logistical services provided by such Motor Carriers.
5. DRIVE-AWAY SERVICES. On an individual request basis, Broker may agree to arrange for the provision of drive-away services by licensed motor carriers (“Drive-Away Services”) but is not obligated under these Terms to agree to such assignment. If Broker accepts the Drive-Away assignment, Shipper agrees to provide Broker with a transportation order clearly identifying the motor vehicles to be picked up and any other pertinent details necessary for identification of the motor vehicles.
6. RECEIPTS AND BILLS OF LADING. Broker will provide Shipper with proof of delivery for each Shipper shipment tendered hereunder in the form of a signed bill of lading or electronic proof of delivery. Broker shall ensure that bills of lading and proofs of delivery record the count and condition of freight at pick-up and delivery. The terms and conditions of any freight documentation used by Broker or by motor carriers selected by Broker may not supplement, alter, or modify these Terms.
7. INSPECTION AND CLAIMS.
7.1. Inspection.
7.1.1 Origin. The Motor Carriers shall complete an origin inspection of the Shipper’s property, goods or motor vehicles (herein, “motor vehicle(s)” or “cargo”) at the location of pickup of the cargo and shall note any damage to the cargo, and if required in advance by written notice from the Shipper, the Motor Carriers shall have any such damage verified.
7.1.2 Delivery. At time of delivery, the Shipper’s authorized agent at destination shall have the opportunity to conduct an inspection which shall be signed by both the Shipper authorized agent and the Motor Carriers. If there is a dispute regarding the characterization of any damage, both the Shipper authorized agent and the Motor Carriers may make notations in writing. The time allotted for the joint inspection shall be no less than 15 minutes per motor vehicle, up to a maximum of one (1) hour per load.
7.1.3 STI Delivery. If the Motor Carriers deliver after designated delivery hours, the motor vehicle(s) will be “Subject To Inspection” (STI) and the Shipper’s Authorized Agent will have a reasonable time, not to exceed 2 business days, to complete the inspection and send a Letter of Notification (LON) to the Broker and Motor Carriers. The LON must be in the form of a fax or e-mail that contains the following information:
7.2. Liability Limitation
7.2.1 Pertains to all motor vehicles. Broker and Motor Carriers shall not be held liable for losses directly and/or indirectly caused by leaking fluids, battery acid and/or cooling system antifreeze solution; damages and/or losses directly and/or indirectly related to mechanical malfunctions, electrical system malfunction, within or pertaining to the cargo. Broker and Motor Carriers shall not be liable for reimbursement for any consequential or incidental damage that may arise from any of the events set forth in this paragraph. The maximum liability of Broker or the motor carriers for any loss, damage or destruction to Shipper’s freight shall be $100,000 per shipment.
7.2.2 Pertains to remarketed motor vehicles.
7.3. Claims.
7.3.1 Broker shall assist Shipper in the filing and/or processing of claims with the Motor Carriers. To this end Shipper shall provide Broker with an invoice and supporting documentation for each VIN for which it intends to file a cargo claim. The Broker shall forward the claim packet to the Motor Carriers and in the event Motor Carriers fail to pay any validly filed and supported cargo claims, Broker will cause the claim to be paid within 60 days of receiving a completed claims package as part of the services offered to Shipper under these Terms. Such payment shall in no way be construed as the acceptance by Broker of any responsibilities and liabilities of a motor carrier under these Terms or any federal or state laws and regulations.
7.3.2 Shipper must file claims for cargo loss or damage with Broker within nine months and one day from the date of such loss or damage, which for purposes of these Terms shall be the delivery date or, in the event of non-delivery, the scheduled delivery date. Shipper must file any civil action against Broker in a court of law within two (2) years from the date the Motor Carrier or Broker provides written notice to Shipper that the Motor Carriers disallowed any part of the claim in the notice.
7.3.3 If Broker makes full payment to Shipper of a claim, then Shipper shall, in consideration thereof, assign such rights to Broker as reasonably necessary to allow Broker to proceed against the Motor Carriers or other source of loss. Broker shall contact Shipper within a reasonable timeframe after Broker learns of any accident, material delay in delivery, theft, loss, or damage to a motor vehicle.
7.3.4 Upon filing of a freight claim by Shipper, Broker and the Motor Carriers will be afforded a reasonable opportunity to inspect damaged motor vehicles, investigate claims, and respond to Shipper. Neither Broker nor the Motor Carriers shall be held liable to Shipper or other persons, if any, having rights in the motor vehicles where such loss, damage or destruction is related to a force majeure event (as defined below) or the act or omission of Shipper or any of its subcontractors, employees or agents, or the inherent vice, characteristics or nature of the motor vehicles.
7.3.5 If Broker or the Motor Carriers pay any claim of Shipper, which claim amount includes a deduction for salvage value, then either Broker, the Motor Carriers or Broker’s or the Motor Carrier’s insurer, whichever paid the claim, shall be entitled to credit for the salvage value whether or not salvage is actually performed. If Broker, the Motor Carriers, or Broker’s or the Motor Carrier’s insurer pays in full any Shipper claim for a total motor vehicle loss, then Broker, the Motor Carriers, or the paying insurer of either the Broker or the Motor Carriers shall take title to the motor vehicle(s) and/or obtain credit for the salvage value as mutually agreed by Broker and Shipper.
7.3.6 Value for the total loss of any motor vehicle by theft or conversion shall be determined by averaging the clean wholesale values of nationally accepted motor vehicle market guides, plus or minus any adjustments for equipment, mileage and condition.
8. INSURANCE. For the duration of these Terms, Broker will have and maintain, at its expense, the insurance coverage set forth in this Section, and, upon Shipper’s request, will provide proof of its contingent cargo, commercial general liability, and umbrella/excess insurance with not less than the following limits:
8.1. Contingent Cargo Insurance: $300,000.00
8.2. Commercial General Liability Insurance: $1,000,000.00
8.3. Umbrella/Excess Insurance: $5,000,000.00
9. LIMITATION OF LIABILITY.
9.1. It is understood and agreed that the Broker is not a motor carrier and that Broker shall not be held liable for any loss or damage to the cargo however caused unless caused by Broker’s negligent acts or omissions in the performance of these Terms. Unless responsibility is expressly assumed in writing by Broker, Shipper shall be responsible for procuring any additional insurance coverage to reduce or eliminate any potential loss or exposure for the cargo beyond the coverage provided in these Terms.
9.2. Broker and the Motor Carriers will be afforded a reasonable opportunity to inspect damaged cargo, investigate claims, and respond to Shipper. Neither Broker nor the Motor Carriers shall be held liable to Shipper or other persons, if any, having rights in the cargo where such loss, damage or destruction is caused by a force majeure event (as defined below), the act or omission of Shipper or any of Shippers subcontractors, employees or agents, or the inherent vice, characteristics or nature of the cargo.
9.3. In the case of cargo lost, damaged or destroyed due to causes for which either Broker or Motor Carriers are responsible, the Broker shall agree that liability for cargo damage shall be calculated as follows: Shipper shall determine whether damaged cargo can be sold retail, sold wholesale or sold at salvage value. For damaged cargo that Shipper determines can be sold at retail, cargo damage shall be calculated as all direct costs and expenses Shipper incurs to return the cargo to the condition in which it was tendered to Broker, excluding any administrative expenses Shipper incurs pursuing a cargo claim against the Broker. For damaged cargo that Shipper determines must be sold at wholesale or at salvage value, cargo damage shall be calculated as the original cost of the cargo to Shipper, plus any transportation expenses Shipper incurs transporting the cargo to a wholesale auction site, less the wholesale damage price or salvage value of the cargo, whichever the case may be.
9.4. UNDER NO CIRCUMSTANCES WILL BROKER OR MOTOR CARRIERS BE LIABLE TO SHIPPER, ANY PERSON CLAIMING BY OR THROUGH SHIPPER, ANY SUCCESSOR IN INTEREST TO SHIPPER, OR ANY OTHER PERSON FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR PUNITIVE DAMAGES FOR ANY REASON WHATSOEVER WHETHER OR NOT THE LIKELIHOOD OR CERTAINTY OF SUCH DAMAGES WAS KNOWN OR SHOULD HAVE BEEN KNOWN TO BROKER.
9.5. IN NO EVENT SHALL BROKER BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, OR SPECIFIC DAMAGES WHICH MAY ARISE FROM ANY LOSS OR DAMAGE DURING MOTOR CARRIER’S HANDLING, SHIPMENT, OR DELIVERY OF CARGO.
10. INDEMNIFICATION. Subject to the insurance limits in Section 9, Broker and Shipper shall defend, indemnify and hold each other harmless against any claims, actions or damages, including, but not limited to, cargo loss, or damage, and payment of rates and/or accessorial charges to motor carriers, arising out of their respective performances under these Terms, provided, however, the indemnified Party shall not offer settlement in any such claim without the agreement of the indemnifying Party which agreement shall not be unreasonably withheld. If the indemnified Party offers or agrees to a settlement for such a claim without the written agreement of the indemnifying Party, the indemnifying Party shall be relieved of its indemnification obligation. Neither Party shall be liable to the other Party for any claims, actions or damages due to the negligence of the other Party.
11. ASSIGNMENT. Neither party may assign these Terms without obtaining the advance written consent of the other Party, which consent will not be unreasonably withheld. A permitted assignment must be made through a signed, written instrument. These Terms shall be binding upon the assignee, if it is properly assigned in accordance with this paragraph.
12. SEVERABILITY. If any term or condition of these Terms is held to be invalid or unenforceable by a court or tribunal of competent jurisdiction, such term or condition shall be deemed severed from these Terms; and these Terms shall otherwise remain in full force and effect.
13. INDEPENDENT CONTRACTOR. Broker is an independent contractor. Broker, the motor carrier, and their employees, are not, and will not be, employees or agents of Shipper. Nothing contained herein shall create or imply any employment, partnership, joint venture or agency relationship between Broker, motor carrier, or their employees and Shipper. Shipper does not exercise or retain any control or supervision over Broker, its operations, employees, agents or motor carriers. Shipper’s requirements for motor carriers are intended to ensure that Shipper obtains efficient, effective and reliable transportation services and are not intended to control or supervise Broker or any motor carrier.
14. CONSENT TO CONDUCT BUSINESS ELECTRONICALLY.
14.1. Pursuant 76 Fed. Reg. 411 (Jan. 4, 2011), issued by the FMCSA, Broker and Shipper consent and agree to conducting business electronically using one or more of the following methods: (i) the captured image method – wherein an image of a scripted name or legal mark is created on an electronic pad, and that image is then used to populate an electronic version of the document to be signed electronically by the Shipper, the Broker, or the motor carrier, or all three; or (ii) the web-portal method, under which electronic signatures are accomplished via a web portal in a manner that identifies and authenticates Shipper, as the source of the electronic communication transmitted through the web portal (i.e., by Shipper's logging onto the web portal using unique credentials) and indicates Shipper’s approval of the information contained in the electronic communication.
14.2. This consent encompasses the use of electronic methods to accomplish the signature of any document, including, without limitation, any supplement, modification, addendum, amendment, notice, consent and/or waiver, required by these Terms or required by FMCSA regulations to be generated and maintained (or exchanged by private parties), including, without limitation, shipment invoices, bills of lading and other supporting shipment documentation.
14.3. The Parties agree that when either Party uses any of the electronic methods described above to accomplish electronic signatures, the chosen method: (1) identifies and authenticates the signing Party as the source of the electronic communication; (2) indicates the signing Party’s approval of the information contained in the electronic communication; and (3) produces an electronic document with the same integrity, accuracy, and accessibility as a paper document or handwritten signature.
14.4. Either Party may elect, with respect to any document, to use a manual/hardcopy signature, provided that such election shall not preclude the other Party from applying an electronic signature, of the above-specified kind, to the same document.
15. FORCE MAJEURE. Brokers’ obligations to arrange transportation services, and any obligation of Shipper’s to use services arranged by Broker, shall be temporarily suspended during any periods when either of the Parties is unable to comply with the requirements of these Terms by reason of acts of God, public enemy, war or terrorism, fire, floods, hail, epidemics, pandemics, disease, civil commotion, closing of public highways, act or interference of public authority, and other situations similar to the foregoing, beyond the control of the affected Party (each, a “force majeure event”). The Party unable to perform because of a force majeure event shall use reasonable efforts to mitigate the other Party’s damages, and shall give the other Party reasonable notice of the force majeure event.
16. GOVERNING LAW AND VENUE. These Terms shall be construed and interpreted in accordance with and be governed by the laws of the State of Michigan and any federal regulations and legislation that pre-empt or supplement the laws of the State of Michigan without giving effect to any choice or conflict of law provision or rule that would cause the laws of other jurisdictions to apply. Further, the Parties consent to submit all legal proceedings directly or indirectly arising out of, pertaining to or relating to these Terms, to the exclusive jurisdiction of the courts of the State of Michigan sitting in Wayne County, Michigan, including the United States District Court for the Eastern District of Michigan. EACH PARTY, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THESE TERMS.
17. ARBITRATION. In the event of any dispute over any terms of these Terms, Shipper or Broker shall have the right, in its sole discretion, to submit the claim to arbitration before the American Arbitration Association, in addition to its other rights and remedies. If the dispute submitted to arbitration by either party involves damages of less than $75,000, the American Arbitration Association Expedited Procedures shall apply.
18. CONFIDENTIALITY. Broker shall not utilize Shipper’s name or identity in any advertising or promotional communications without written confirmation of Shipper’s consent, and the Parties shall not publish, use or disclose the contents or existence of these Terms except as necessary to conduct their operations pursuant to these Terms. Broker will require its motor carriers and/or other brokers to comply with this confidentiality clause.
19. NO THIRD-PARTIES. These Terms do not confer any enforceable rights or remedies upon any person or party other than the Broker and a Shipper who engages Broker for Services. There are no third-party beneficiaries to these Terms.
20. SURVIVAL. Any terms of these Terms that would, by their nature, survive the termination of these Terms will so survive.
21. NOTICE. Except as otherwise expressly provided herein, all communications, notices and disclosures required or permitted by these Terms shall be in writing and shall be deemed to have been given when delivered personally or by messenger or by overnight delivery service, or within 5 days of being mailed by registered or certified United States mail, postage prepaid, return receipt requested, to the Shipper at any address provided orally or located in any written document the Shipper sends the Broker; to the Broker addressed to “Harmonic Routes LLC, ATTN: Administration, (Put P.O.Box”); or to such other address as Shipper or Broker designates by notice in writing to the other party in the manner provided by this Section.
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