Common Carrier vs Contract Carrier

What Is the Difference Between a Common Carrier and a Contract Carrier?

A common carrier offers transportation services to the general public under published rates and is legally obligated to carry freight for any paying customer, without discrimination. A contract carrier operates under individually negotiated contracts with specific customers and isn't obligated to serve the general public.

How Each Model Works

Common carriers (like most parcel and less-than-truckload carriers) publish standard rates and terms available to anyone. Contract carriers negotiate custom rates, service levels, and terms with each specific shipper, giving both parties more flexibility but limiting the carrier's obligation to serve only those it has contracted with.

Why This Distinction Matters

The common carrier vs contract carrier distinction affects liability, in general, common carriers face stricter liability standards for cargo loss or damage under law, while contract carrier liability is defined by the negotiated contract terms. Shippers negotiating high-volume or specialized freight arrangements should understand which model applies to know what liability protections they actually have.