What Does Contract Carrier Mean?
A contract carrier is a transport company that limits its shipping or trucking line to certain people or organizations. It assigns a contract to the people or organizations that it serves for a specific period of time.
Insuranceopedia Explains Contract Carrier
Contract carriers differ from the common carrier most people are familiar with. Common carriers like commercial airlines and passenger boats sell tickets to practically anyone who wishes to buy transportation services from them. Contract carriers, on the other, retain the right to choose the people or goods it wishes to transport. This is usually done through a negotiation and is then sealed by a contract. The contract often has a specific period. The carrier may then renew the contract or entertain another client.
Contract carriers cannot legally operate without liability insurance.