Contract Carrier

What Does Contract Carrier Mean?

A contract carrier is a transportation company that restricts its shipping or trucking services to specific individuals or organizations. It enters into contracts with these clients for a designated period, outlining the terms and conditions of the service provided.

Insuranceopedia Explains Contract Carrier

Contract carriers differ from common carriers, which many people are more familiar with. Common carriers, such as commercial airlines and passenger boats, sell tickets to virtually anyone seeking transportation services. In contrast, contract carriers have the discretion to select the individuals or goods they choose to transport. This selection process typically involves negotiation and is formalized through a contract, which often specifies a particular duration. The carrier may subsequently renew the contract or take on another client.

Additionally, contract carriers are required by law to carry liability insurance to operate legally.