Contract carriers are dedicated freight carriers that haul products by long-term agreement, generally an annually renewable contract. These types of truckload carriers can work with your company on an exclusive or non-exclusive basis, depending on the frequency of your shipments and the agreed contract terms.
Contract trucking companies are effective for many shippers because they eliminate the need to search for available trucks. Instead, shippers can easily schedule trucks to be ready and waiting whenever needed -- thus enabling JIT freight. With the use of dedicated trucks, logistics planning is simplified. In addition, drivers become familiar with the shipper’s method of operations, thereby eliminating the need for staff to explain facility directions and procedures over and over again.
To develop a successful relationship with a dedicated contract carrier, it’s important to find a carrier with the following qualities:
1. Consistently available equipment and personnel to match your truckload contracts;
2. Possessing appropriate insurance and permits, including contract carrier authority; and
3. A high FMCSA safety rating.
Action Steps
The best contacts and resources to help you get it done
Find contract carrier services within your shipping lanes
Search load boards for available trucks within your logistics lanes. Most carriers will list their status (common, contract or both) in their company contact information. If a carrier servicing your lanes doesn't specify status, inquire if they have contract carrier service authority.
I recommend: Search load boards such as
GetLoaded.com and
Internet Truckstop. Not only will you find carriers localized to your shipping lanes, but you’ll also have hundreds of common carriers at your fingertips if you should need a truck for an immediate shipping emergency.
Screen potential dedicated contract carriers to reduce your financial risk
Use only carriers with appropriate contract carrier authority, insurance and permits. In case of an accident, this helps ensure your product is covered and your business liability is minimal to non-existent.
I recommend: Verify a contract carrier’s authority and insurance coverage for free using the FMCSA’s
L&I Report. Review contract carrier safety ratings by company, equipment and drivers using
SafeStat.
Negotiate mutually beneficial trucking contracts with your dedicated carriers
Freight rates can vary based on equipment required, number of dedicated shipments, return freight, lumping requirements, gross weight, tolls and more. Reassess carrier contracts frequently. Have industry rates available when you go to the bargaining table, but be willing to negotiate for the most beneficial solution.
I recommend: Identify data for freight contract negotiation (or renegotiation) at
Multichannel Merchant. Find current industry rates for over 50 top carriers using
Freight & Shipping, Inc.
Tips & Tactics
Helpful advice for making the most of this Guide
- Never load a contract carrier without a signed blanket agreement that outlines the responsibilities of both shipper and dedicated carrier. The contract should specify carrier equipment and insurance requirements, as well as address loading and unloading, detention, driver assists, lumper services, tolls and weight tickets. In addition, every load should have a single page, secondary contract outlining specific rate and detail information for each specific move.
The official source of Contract Carriers is the Contract Carriers page at Business.com
Related Resources from Business.com
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