Choosing Between a Common Carrier and Contract Carrier

When it comes to freight transportation, businesses have a variety of carrier options to choose from, but not all operate the same way. Two key players are common carriers and dedicated contract carriers. Understanding how these carrier types function can help shippers, truck drivers, and businesses make informed decisions about their transportation needs.

What is a Common Carrier?

A common carrier is a transportation provider that serves the general public, moving goods between locations. This means their services are available to anyone who needs them, provided they can pay the transportation charges. Common carriers are obligated to serve all customers equally, as long as the request complies with legal and operational requirements.

Key Features of a Common Carrier

Transportation Methods

Common carriers use multiple types of vehicles to meet various transportation needs. This includes dry vans, refrigerated trucks, flatbed and tank trailers, and specialized vehicles.

Service Accessibility

One of the biggest advantages of common carriers is their broad accessibility, making them a dependable option for businesses of all sizes. Their ability to quickly load goods and navigate an extensive network ensures timely delivery. This flexibility makes common carriers a preferred choice for many industries.

Safety Regulations

Common carriers must adhere to safety regulations to reduce the risk of damage to goods and ensure safe transit. These include:

• Speed control and weight limitations.
• Mandatory vehicle inspections.
• Driver working hours to prevent fatigue.

Additional Features of Common Carriers:

• Operates on a regular route or schedule.
• Serves the general public.
• Must comply with federal motor carrier safety administration (FMCSA) regulations.
• Requires liability insurance and cargo insurance.
• Charges are based on a published tariff, which outlines rates and terms for their services.

Examples of Common Carriers:

• Trucking companies transporting goods for multiple customers.
• Freight carriers serving customers along predefined routes.
• Household goods movers available to the general public.

What is a Contract Carrier?

A contract carrier, on the other hand, provides trucking services to specific customers based on individual contracts. They do not serve the general public, but instead tailor their services to meet the needs of their clients. By working closely with a select group of customers, contract carriers provide more specialized and reliable services.

Key Features of a Contract Carrier

1. Exclusive Agreements

Unlike common carriers, contract carriers establish long-term agreements with clients. This enables them to develop customized solutions that cater to specific logistics challenges. These can include:

• Dedicated routes for efficient delivery.
• Specialized equipment for handling unique goods.
• Custom schedules to align with production timelines.

2. Predictability

With pre-negotiated contracts, businesses gain cost predictability. This allows for better budgeting and eliminates the uncertainty of fluctuating transportation rates.

3. Enhanced Reliability

Contract carrier’s ability to allocate resources efficiently leads to consistent delivery schedules and fewer delays. A close relationship between the carrier and the client also creates clear communication and better coordination.

Additional Features of Contract Carriers: 

• Operates under a contract with one or more customers.
• Offers flexibility in routes, schedules, and services.
• Transports household goods, alcoholic beverages, and other cargo of an unusual nature.
• May provide storage facility services for clients.
• Works with shippers who have specific requirements, such as tank trailer transportation or handling of hazardous materials.
• Rates are negotiated privately.

Examples of Contract Carriers:

• Trucking companies dedicated to transporting products for a specific retailer.
• Logistics providers serving manufacturers under exclusive agreements.

Key Difference Between Common and Contract Carriers

The main difference between a common carrier and a contract carrier in the trucking industry lies in their service availability and obligations. A common carrier serves the general public and is legally required to transport goods for anyone, provided they meet the carrier’s terms and there is capacity available. In contrast, a contract carrier works exclusively with specific clients under private agreements, offering customized services and schedules tailored to their customers’ needs.

Similarities Between Common and Contract Carriers

1. Distance Capabilities: Both types of carriers can handle transportation needs over short or long distances.
2. Regulatory Oversight: Both are subject to FMCSA regulations, ensuring safety and compliance in their operations.
3. Transportation Services: They both use commercial motor vehicles to move freight.
4. Insurance Requirements: Both types of carriers are required to have liability insurance and cargo insurance to protect against potential losses or damages.
5. Flexible Scheduling: Depending on the agreement, both can provide flexible scheduling options for shippers.

Why Does This Matter for Trucking?

For Shippers

If you have general freight and flexible schedules, a common carrier may be cost-effective. For specialized or recurring shipments, a contract carrier offers customized solutions.

For Truck Drivers

Understanding these categories can help you decide which type of motor carrier to work for, based on your preferences for routes and schedules.

Choosing the Right Carrier

When deciding between a common carrier and a contract carrier, consider the following:

Use a Common Carrier If:

• You need to transport goods without specific requirements.
• You’re shipping items on a one-time basis.
• Cost efficiency is a priority, and you’re okay with standardized services.

Use a Contract Carrier If:

• You need specialized services, such as transporting oversized goods.
• You’re shipping on a recurring basis and need a long-term solution.
• You require additional services, such as storage facility management or water transportation.

Ship Your Goods With Mercer Transportation

At Mercer Transportation, we specialize in providing customized shipping solutions to meet your needs. As one of the top names in the industry, we offer flexible and reliable services, ensuring your freight is handled with care and delivered on time.

Whether you need the flexibility of a common carrier or are seeking long-term support for your logistics, we are here to help. With our commitment to safety, efficiency, and customer satisfaction, we’re the trusted choice for businesses across the United States.

Contact us today to learn how we can support your trucking and freight needs.