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What is a transport exchange and how does it work?

A freight exchange is - basically - a site with load ads through which customers find transport for their goods.

The mechanism is simple: The customer publishes an ad with the goods he has to transport, and then receives offers (telephone, chat, etc.) from the carriers registered on the site interested in the ad.

If the customer and the carrier agree on the payment amount and other details (loading/unloading date etc.), the transport can be considered in principle agreed, and the customer can delete the ad from the site.

In order to seal the agreement in a contract with legal value, the customer will conclude a transport order with the carrier.

After the transport is performed, the customer will pay the carrier according to the terms agreed in the transport order. At this point, the shipment can be considered successfully completed.

Visually, the whole process can be summarized as having the following steps:

1. The client publishes an announcement on the freight exchange with the goods to be transported
2. The carrier sees the cargo ad and contacts the customer
3. The two agree on the price and the other details
4. The customer sends a transport order to the carrier (more in the section How do I send a transport order?)
5. The carrier picks up the goods at the date/time provided in the order*
6. After the transport takes place, the carrier personally delivers or sends by courier to the customer the original documents (invoice, CMR, notice accompanying the goods or possibly other documents, if applicable)
7. Upon receipt of the documents, the customer will make the payment - which can be at unloading or at term, according to the terms agreed in the order.

* Note: Upon loading, the carrier is obliged to leave a copy of the CMR carriage letter to the sender. This will serve as proof that he has loaded the goods. The same goes for downloading, where a copy will remain with the recipient. More details here.

Cargopedia's advice: Especially if you have valuables goods, before ordering, make sure that the carrier has CMR insurance (according to the law, it is not required to have!).

CMR insurance is the transport equivalent of car insurance in the automotive industry. Specifically, if the carrier has CMR insurance and your goods are damaged during transport or you notice deficiencies in unloading, you can be compensated.

The values of CMR insurances are generally between 5,000 - 1,000,000 EUR. Not to be confused with the CMR carriage letter - mentioned above, they are two distinct things!

You can find out more about CMR insurance here.

What is a transport order?

Trade relations are based on a contract. The transport order is a contract between the customer and the carrier, which seals an agreement of firm will of the participating parties to collaborate - with some assumed obligations - in order to carry out the transport.

When placing a transport order, the customer has, for example, the promise that the carrier will come to the load on the set date/time, and the carrier has the guarantee that it will be paid by the customer according to the agreed terms.

The importance of the transport order

A transport order generates reciprocal rights and obligations, interdependent between the parties.

Both the carrier and the beneficiary of the transport have some obligations that they have to comply with, such as: loading and unloading terms and locations, weight and type of goods to be transported, transport price, method of payment etc.

These data are specified in the transport order and must be respected by both parties, otherwise they will be subject to penalties/clauses in the order.

In summary, by using a transport order, the beneficiary of the transport has the guarantee that the carrier will carry out the transport according to the accepted order and the carrier has the guarantee that he/she has the consent to go to load the goods and that, after the transport, he/she will be paid for the service.

How do I send a transport order?

Typically, the client writes the transport command in a text editor (e.g.: Word), then prints it, signs&stamps it and sends it to the carrier.

The carrier completes it with the data of the truck that comes to load (registration plate number) and the name/phone of the driver, and then he signs&&stamps it, after which he will scan it and send it back to the customer.

If you do not have a transport order template, Cargopedia provides you with a template, which you can download here. Of course, you can modify and adapt it to your liking.

Cargopedia's advice: Do not accept unstamped shipping orders. An unstamped order is practically an unconfirmed order, so it has no value.

What happens if I work without a transport order?

Although there are cases in which, for convenience, parties choose not to work with a transport order, Carogopedia does not recommend this practice.

What is important to remember is that without a transport order there is no legal contract, so no assumption in case of non-appearance at loading, non-payment etc. Specifically, you work at your own risk, and in the event of a transportation or payment incident, legally, the options are very limited. Practically, there is no legal basis for that transport.

Of course, there are situations in which the value of the goods or transport is very small, and the parties choose - for reasons of time - not to make a transport order.

It is ultimately your choice how you choose to work and how you quantify your risks. Just keep in mind that all serious, professional companies work on the basis of transport orders.