Contract Carrier

A contract carrier operates under private agreements with select shippers, hauling freight at rates and terms negotiated between the two parties rather than under publicly filed tariffs. This is the most common relationship structure for shippers with steady freight volumes – you negotiate a rate per lane, commit to a minimum volume or tender acceptance expectation, and the carrier prioritizes your freight accordingly.

Contract carrier agreements typically specify rates by lane or region, minimum volume commitments, service-level expectations such as on-time pickup and delivery targets, accessorial charge schedules, and liability terms. These agreements are formalized in a routing guide – a prioritized list of carriers assigned to each lane – and are usually renegotiated annually or during a formal RFP process. The shipper gets rate predictability; the carrier gets volume certainty.

The business case for contract carrier relationships comes down to cost stability and capacity assurance. When spot market rates spike – as they do cyclically – shippers with strong contract carrier programs are insulated from the worst of the volatility. In return, honoring tender commitments during soft markets, when spot rates drop below contract levels, builds the carrier loyalty that keeps trucks showing up when capacity tightens. Shippers who chase spot rates in every cycle often find themselves without reliable capacity when they need it most.

Managing a contract carrier network at scale requires disciplined rate management, routing guide compliance tracking, and carrier performance monitoring – all of which become exponentially harder as shipment volume grows beyond what spreadsheets and email can handle.