Broker Carrier Agreement Template for Indonesia

A Broker Carrier Agreement is a crucial legal contract that governs the relationship between freight brokers and transportation carriers in Indonesia's logistics sector. This document formalizes the partnership where brokers act as intermediaries connecting shippers with carriers who provide actual transportation services. Under Indonesian law, this agreement ensures compliance with transportation regulations while protecting both parties' interests and establishing clear operational frameworks for freight brokerage activities.

When do you need this document?

You need a Broker Carrier Agreement when establishing a formal business relationship between a freight brokerage company and transportation carriers. This includes situations where logistics companies want to expand their carrier network, trucking companies seek to work with multiple brokers, or shipping lines need structured partnerships with freight forwarders. The agreement is essential when you're operating in Indonesia's transportation sector and need to comply with regulatory requirements while ensuring clear terms for service delivery, payment, and liability. It's particularly important when dealing with high-value cargo, cross-provincial transportation, or when seeking to establish long-term business partnerships in the freight industry.

Key legal considerations

Several critical legal elements must be addressed in your Broker Carrier Agreement to ensure enforceability and compliance. Insurance and liability provisions are paramount, requiring clear allocation of responsibility for cargo damage, delays, and third-party claims. Payment terms must specify rates, invoicing procedures, and settlement timelines to avoid disputes. Service level agreements should define delivery standards, communication protocols, and performance metrics. The contract must also address termination procedures, including notice periods and obligations upon contract end. Additionally, include provisions for dispute resolution, preferably through arbitration, and ensure compliance with Indonesian Civil Code requirements for contract formation and performance.

Legal requirements in Indonesia

In Indonesia, Broker Carrier Agreements must comply with Law No. 22 of 2009 on Road Traffic and Transportation, which regulates freight transportation services and carrier obligations. Government Regulation No. 74 of 2014 provides detailed implementation requirements for transportation businesses, including licensing and operational standards. Both parties must hold valid business licenses and transportation permits as required by Ministry of Transportation regulations. The agreement must conform to Law No. 40 of 2007 on Company Law regarding business entity operations and Indonesian Civil Code provisions governing contractual relationships. For maritime transportation components, compliance with Law No. 17 of 2008 on Shipping Law is required. The contract should be executed in Indonesian language or include certified translations, and parties must ensure their operations comply with local safety, environmental, and tax regulations.