Non Disclosure Agreements and Transportation Contracting

Non Disclosure Agreements have become much more commonplace between Shippers, Carriers, Freight Brokers, and Freight Forwarders.  So what is their purpose and how closely should they be reviewed?   Well they can certainly be an important document for LTL companies to the extent they consider their pricing or on-line tools proprietary.  However, what about Truckload Companies?  Are Shippers really that concerned that their freight will be re-engineered and used against them?

The real answer seems to be that these documents are largely sent out as a matter of course by legal compliance departments.  This is because in order to prosecute a claim for breach of confidentiality or loss of trade secret, it is often a legal requirement that the party alleging harm demonstrate that they have taken reasonable efforts to protect their proprietary information.  This means showing how many of their contracts contain such protections.  It is much easier to have an executive sign an affidavit stating that NDA’s are part of a business process in all commercial transactions than to try and describe how the decision was made to only require NDA’s for certain types of transactions.

So, sometimes the NDA sent with a transportation bid is actually sent to protect the information or trade secret of the company in an area that has nothing to do with transportation.