Contract carriers are trucking companies that work by contract and agreement with shippers to deliver goods throughout the country. Truckload carriers sometimes work in conjunction with other modes of transportation to move goods around the country. Truck transport moves 69% of all goods throughout the US.

Trucking contracts are used with companies that have need of regular transportation of goods. Dedicated freight carriers carry food, building supplies, household goods and every other kind of cargo.

1. Contract carrier services are used by small and large businesses to transport goods on a regular schedule.

2. Truckload carriers are expected to be on time and make deliveries as scheduled.

3. Businesses that need contract carriers to move their cargo make long-term agreements with carriers as to pricing, type of trucks needed (refrigerated trucks, for example), as well as insurance conditions.

4. Contract carriers now use trucks with lower emissions and GPS technology for better driving times.

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Get info on contract carriers basics

Contract carrier service falls under the broad umbrella of the trucking industry as a whole. If you're thinking of entering into a trucking contract, learn more about contract carriers basics.

I recommend: Trucking Industry Facts gives a breakdown of the of the industry's financial stats, number of companies and how much cargo is moved by trucking. Trucking Info gives more in-depth info on the industry and a list of the 100 more profitable trucking companies.

Look at trucking industry commentary for more info on contract trucking

Commentary from different sources can provide basic insight on contract trucking and dedicated carriers.

I recommend: EDS discusses the trucking industry emerging trends in warehousing, contracts and logistics with regard to truckload carriers. See Freight101.com for a good list of frequently asked questions on contract trucking.

See how trucking and trucking contracts are evolving

Research by the government and academic institutes can keep you informed of the changes affecting a dedicated freight carrier business.

I recommend: The United States Department of Transportation Intelligent Transportation Systems report goes into detail as to the ways in which different technology such as GPS affects truck load carriers and their services. The Institute of Transportation Studies details how shippers have changed the ways they use contract carriers.

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• •  The contract carriers basics, or the basics of contract carriers, suggests that technology, economic conditions and governmental regulation all contribute to how contract trucking is performed.

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.

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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

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• •  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.

Being a dedicated contract carrier means that you provide transportation services to a specific shipper under an agreement that you'll be compensated. Trucking contracts involve driving large vehicles with large loads and being on call 24 hours a day. This is a demanding job with a lot of responsibility, therefore the training and education involved in this profession is extensive.

A great deal of information is available regarding how to become a contract carrier and what it means to be a truckload carrier. Contract carriers education and training is required to begin work in this profession as there are several rules and regulations that apply. In order to start your career you need to:

1. Attend a truck driving school to earn a Commercial Drivers License (CDL), necessary for contract carriers.

2. Take advantage of training courses offered by motor associations for continued education in contract carrier services.

3. Apply for the appropriate truckload carrier registration and insurance.

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Enroll in driving schools that license truckload carriers

Before you provide any contract carrier services you must have a CDL which you can obtain through various truck driving schools.

I recommend: TestQuestionsAndAnswers.com gives you general information about the CDL as well as what happens after you obtain this license. C1 Truck Driver Training offers a driving training program in locations outlined on their website with training that ranges from classroom to behind the wheel. USTruckingSchools.com has a choice of truck driving schools grouped by state and gives a short overview of each school.

Become a member of an association for truckload carrier training

The purpose of associations is to get people of the same profession together so they can network, receive training, and stay up-to-date on industry news. Becoming a member of an association is not required but is helpful to becoming dedicated contract carriers as they offer ongoing training and informational programs.

I recommend: Truckload Carriers Association has the Truckload Academy (TLA) that offers educational and informational programs to their members. National Motor Freight Traffic Association (NMFTA) offers classification training seminars that will instruct you on commodity descriptions and the National Motor Freight Classification (NMFC) rules.

Get educated on proper registration and insurance for contract trucking

Appropriate insurance and registration are a part of the requirements for a contract carrier. The Federal Motor Carrier Safety Administration's (FMCSA) sole purpose is to reduce injuries, fatalities and on-the-road accidents that involve large trucks and buses. The association requires you to complete registration forms depending on the type of trucking authority. Many corporations and companies want a copy of the carrier's insurance certificate as part of the contract carriers application. They'll tell you how much cargo and auto liability coverage you need.

I recommend: FMCSA has online registration that helps you determine what forms are required. BNET has an article that gives an overview of motor truck cargo insurance.

Tips & Tactics

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• •  Visit truck stops as part of your contract trucking training and talk with drivers to get a first hand account of the life of a truck driver.

When a shipper contracts with a carrier that works for hire, the two parties negotiate terms until they come to an agreement. Knowing contract carriers key terms helps both the shipper and the carrier decide on the terms for the agreement.

Since regulated common carriers transport general commodities, which are regulated by the ICC, it's important for you to understand contract carriers key terms. This helps open clear communication between shippers and carriers in product transportation.

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Commodity

A commodity is a movable good, man-made or natural, offered for sale on the general market. Contract carriers arrange for shipment of commodities from one place to another.

I recommend: Keeney Truck Lines describes the types of commodities it transports as a contract carrier.

Interstate Commerce Commission

The Interstate Commerce Commission (ICC) sets rates and supervises carriers as they transport people and goods. The ICC is an independent federal agency.

I recommend: BNet discusses the distinction between ICC regulated motor and contract carriage. It discusses legalities and differentiations in the types of contracts.

Ad hoc

Ad hoc is a Latin phrase meaning improvised or impromptu. Contract carriers use this term to refer to transportation agreements that don't include a long-term contract.

I recommend: Alliance Airlines differentiates between long-term agreements and ad hoc contracts.

Fixed route

Transit services frequently run vehicles on a pre-designated, regular route. Contract carriers call this a fixed route.

I recommend: The Wisconsin Department of Transportation offers a list of fees on its website, including fees for contract carriers. It covers local carriage carriers, as well as fixed-route carriers.

Irregular route carrier

An irregular route carrier uses roads not specific to any particular highway or a route not adhering to a particular schedule.

I recommend: Wyo State Law Library defines an irregular route carrier in detail and also discusses different taxes placed on contract carriers that use irregular routes.

Substituted service

Contract carriers sometimes work with a third-party carrier or an independent contractor. When they use this type of assistance in the industry, it's a substituted service.

I recommend: Anthony M. Brida discusses several issues related to contract carriers on its website. It clearly defines a substituted service and explains the benefits of using one.