When it comes to shipping goods, there are two main types of carriers: contract carriers and common carriers. While both provide transportation services, there are some distinct differences between the two that are important to understand.
Contract carriers are contracted by a company to transport goods on an exclusive basis. This means that the carrier is hired by a specific company to transport their goods, and they are not open to transporting goods for other companies. Contract carriers are typically used when a company has a consistent need for transportation of goods, such as a manufacturer that needs to transport their products to retailers.
On the other hand, common carriers are open to transporting goods for anyone who needs their services. Common carriers are required by law to transport goods for anyone who requests their services, as long as the goods are legal and can be transported safely. Examples of common carriers include UPS, FedEx, and the United States Postal Service.
One of the key differences between contract carriers and common carriers is liability. Contract carriers are liable for any damage or loss that occurs during transportation, as they have a direct contract with the company that hired them. Common carriers, on the other hand, have limited liability for damage or loss that occurs during transportation. This is because they transport goods for a variety of customers, and it would be unreasonable to hold them responsible for every possible scenario.
Another difference between contract carriers and common carriers is pricing. Contract carriers typically charge a higher rate than common carriers because they provide exclusive transportation services. Common carriers, on the other hand, offer standardized pricing based on the weight and dimensions of the package.
In conclusion, both contract carriers and common carriers provide transportation services for goods. However, contract carriers are hired on an exclusive basis and have liability for any damage or loss that occurs, while common carriers transport goods for anyone who requests their services and have limited liability. Understanding the differences between the two will help businesses make the right choice for their transportation needs.