Setoff (offset) clause
A setoff (or offset) clause lets the broker take money it says you owe, for example a cargo claim or a fine, out of the pay for this load or any other load. The money can be taken before anyone has agreed the claim is valid.
What a setoff clause looks like
Broker may offset any amounts owed to broker by carrier against freight charges due to carrier on this or any other shipment, including cargo claims.
The key words are "offset", "set-off", "against any amounts due" and "this or any other shipment". Together they let a broker hold back your pay on a clean load to cover a dispute on a different one.
Why it matters
- Earned pay becomes collateral. You can deliver three loads on time and still be paid nothing because of a claim on a fourth.
- The broker decides the amount. Unless the clause limits it, the broker can set off the amount it claims, not an amount anyone has proven or agreed.
- It reaches factored invoices. If you factor, a setoff against "amounts due to carrier" can collide with your factoring agreement, which may require you to make the factor whole.
- It flips who has to sue. Without setoff, a broker with a claim has to pursue you. With setoff, you have to pursue the broker to recover your own freight pay.
How claims are supposed to work
Federal claims rules for carriers describe a written claim process: a claim must identify the shipment, assert liability and ask for a specific or determinable amount; notes on a delivery receipt or an inspection report alone don't count as a claim (49 CFR 370.3). A carrier must acknowledge a claim within 30 days and pay, decline or make a firm settlement offer within 120 days (49 CFR 370.5, 49 CFR 370.9). A setoff clause lets money move before that process runs. See cargo claims for more.
What the Rate Con Checker flags
Any "set-off", "setoff" or "offset" wording is a red flag (15 points off the score), whatever surrounds it. The checker is strict on purpose: setoff is one of the most common ways carriers lose pay they've already earned. A separate claims rule also flags claims deductible "from freight" even when the word "offset" isn't used.
What to ask for
Please strike the setoff/offset language. Any claim should be handled separately, not taken from freight pay.
If the broker won't strike it, narrower versions are better than nothing: limit setoff to this load only, to amounts both parties have agreed in writing, or to final judgments. Get any change in a revised rate con, not an email that says "don't worry about it".