What Is Charge-Back in Trucking?
Also called: Chargeback, Settlement Deduction, Carrier Deduction, Charge-Back Items
A charge-back is an amount a carrier pays up front for you, or on your behalf, and then deducts from your settlement. Under the truth-in-leasing rules, every item the carrier may charge back must be listed in your lease, with how each amount is figured. You may ask for the documents that show a charge is valid. A carrier must explain and itemize a cargo damage deduction in writing before it makes it.
Last reviewed September 23, 2026 · Facts checked November 4, 2026
Key Points
- If your settlement shows a deduction you do not recognize, compare it with the charge-back list in your lease, and ask the carrier in writing for the documents behind it (49 CFR 376.12(h))
- The lease must clearly specify all items that may be paid first by the carrier but deducted from your pay at settlement, with how each amount is computed (376.12(h))
- You must be given copies of the documents needed to decide whether a charge is valid (376.12(h))
- You are not required to buy or rent products, equipment or services from the carrier as a condition of the lease. The terms of any purchase or rental it deducts for must be in the lease (376.12(i))
- If the carrier will charge back for insurance, the lease must state the amount. If you buy insurance through the carrier, it must give you a copy of the policy on request and a certificate that shows the insurer, policy number, dates, coverage, your cost and your deductible (376.12(j)(1) and (2))
- The lease must state the conditions for deducting cargo or property damage. The carrier must give you a written explanation and itemization before it makes any such deduction (376.12(j)(3))
- The carrier takes the risk and cost of fines for overweight or oversize pre-loaded, sealed or containerized trailers, and for improperly permitted loads, unless your own acts or omissions caused the violation. It must reimburse you if you paid (376.12(e))
- If you are paid a percentage of gross revenue, the carrier must give you a copy of the rated freight bill at or before settlement. You may also examine its tariff (376.12(g))
- We found no federal list of allowed charge-backs. The lease is the list
Charge-back rules in 49 CFR 376.12
| Rule | What it says | |
|---|---|---|
| All charge-back items | 376.12(h) | Listed in the lease, with how each amount is computed. You get the documents to check a charge |
| Buying or renting from the carrier | 376.12(i) | Not required as a condition of the lease. Terms of any deduction for a purchase or rental must be in the lease |
| Insurance | 376.12(j)(1) and (2) | Amount of any charge-back stated. Policy copy and certificate on request if you buy through the carrier |
| Cargo or property damage | 376.12(j)(3) | Conditions stated in the lease. Written explanation and itemization before any deduction |
| Fines on sealed or pre-loaded trailers | 376.12(e) | The carrier bears them and reimburses you, unless your own acts or omissions caused the violation |
What should you do when a settlement shows a deduction you do not recognize?
Do not assume it is wrong, and do not assume it is right. First, find the charge-back list in your lease. The rule says every item the carrier may deduct must be on it, with how the amount is figured (49 CFR 376.12(h)). If the deduction is on the list, check the math. If it is not, ask the carrier why. Then ask in writing for the documents behind the charge. The rule says you must be given the copies you need to decide whether it is valid. Keep every settlement sheet and every reply. If you are paid by percentage, ask for the rated freight bill for the load too.
What is a charge-back?
A charge-back is money the carrier pays first, or pays on your behalf, and then takes out of your pay at settlement. The rule's wording is items "initially paid for by the authorized carrier, but ultimately deducted from the lessor's compensation at the time of payment or settlement" (49 CFR 376.12(h)). The rule names several kinds: insurance, cargo or property damage, and payments on equipment you buy or rent through the carrier. The lease must list each one.
What must the lease say about charge-backs?
It must clearly specify every item that can be charged back, and how each amount is computed (376.12(h)). It must say whether you have agreed to any equipment purchase or rental that lets the carrier deduct payments from your pay (376.12(i)). It must state the amount of any insurance charge-back (376.12(j)(1)). It must state the conditions for deducting cargo or property damage (376.12(j)(3)). If an item is not in the lease, the rule gives you a basis to ask why it was deducted. A lawyer can tell you more about a specific deduction.
What can a carrier charge back for insurance and cargo damage?
For insurance, the carrier has a legal duty to carry public liability insurance. The lease must say who provides other coverage, such as bobtail, and the amount of any charge-back for it (376.12(j)(1)). If you buy insurance through the carrier, it must give you a copy of the policy on request, and a certificate that shows the insurer, policy number, dates, coverage, your cost and your deductible (376.12(j)(2)). For cargo or property damage, the lease must state the conditions for a deduction. The carrier must send a written explanation and itemization before it deducts anything (376.12(j)(3)).
Can a carrier make you buy or rent from it?
Not as a condition of the lease. The lease must say you are not required to buy or rent products, equipment or services from the carrier to enter the lease (49 CFR 376.12(i)). If you choose to buy or rent something from the carrier, and it deducts payments from your pay, the lease must state the terms of that deal. Read those terms before you sign. Compare the cost with buying elsewhere.
Who pays fines on a sealed or pre-loaded trailer?
The rule puts those fines on the carrier. The carrier takes the risk and cost of fines for overweight and oversize trailers when they are pre-loaded, sealed or containerized, or when the trailer or load is outside your control. It also takes the cost of fines for improperly permitted overdimension and overweight loads. The exception is a violation that results from your own acts or omissions. If you paid such a fine, the carrier must reimburse you (376.12(e)). So a charge-back for one of these fines should be questioned. Ask for the documents.
How do you check your settlement?
Check three things. First, the pay. If you are paid a percentage of gross revenue, the carrier must give you a copy of the rated freight bill at or before settlement (376.12(g)). Second, the deductions, against the lease's list (376.12(h)). Third, the timing. The lease must promise payment within 15 days after you submit the necessary delivery documents (376.12(f)). The rules also let you examine the carrier's tariff, or for a contract carrier the documents its rates come from. It may delete shipper and consignee names.
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Frequently Asked Questions
What is a charge-back in trucking?+
An amount a carrier pays first, or pays on your behalf, and then deducts from your pay at settlement. Under 49 CFR 376.12(h), the lease must list every such item and how each amount is computed.
Can a carrier deduct anything from my settlement?+
The lease must clearly specify all items that may be deducted, with how each is computed (49 CFR 376.12(h)). If a deduction is not on that list, ask the carrier to explain it in writing. We found no federal list of allowed charge-backs. The lease is the list.
Can I see the paperwork behind a charge-back?+
Yes. The rule says you must be afforded copies of the documents needed to determine whether a charge is valid (49 CFR 376.12(h)). Ask in writing, and keep the reply.
Can a carrier deduct for cargo damage?+
Only under conditions the lease states. The carrier must give you a written explanation and itemization before it makes any such deduction (49 CFR 376.12(j)(3)).
Can a carrier make me buy insurance or equipment from it?+
The lease must say you are not required to buy or rent products, equipment or services from the carrier as a condition of the lease (49 CFR 376.12(i)). If you buy insurance through the carrier, it must give you a policy copy on request and a certificate (376.12(j)(2)).
Who pays fines for an overweight sealed trailer?+
The carrier does, unless the violation resulted from your own acts or omissions. It must reimburse you if you paid (49 CFR 376.12(e)).
What if a deduction is wrong?+
Ask for the documents in writing and keep your settlement sheets. A carrier that breaks the leasing rules can be liable for damages (49 U.S.C. 14704(a)(2)). This is general information, not legal advice. A lawyer can look at your lease.
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This is industry terminology and typical practice. It is not legal or tax advice. Rates, fees, and rules mentioned are general ranges. Confirm the details on your rate confirmation, carrier agreement, or a current official source.