Common carrier vs contract carrier
A common carrier holds itself out to the general public for hire and serves any shipper under published rates. A contract carrier moves freight under privately negotiated contracts with a limited number of specific shippers. After the 1995 ICCTA, both file the same Form OP-1 for-hire motor-carrier authority — the operational distinction still matters for rate-setting and liability practice.
Side-by-side comparison
| Dimension | Common Carrier | Contract Carrier |
|---|---|---|
| Customer base | Open to any shipper at published rates | Limited number of specific shippers under contract |
| Rate practice | Published tariff or implied 49 USC §14101 obligations | Privately negotiated rates per contract |
| Service obligation | Must serve any shipper at the published rate (subject to capacity) | Only required to serve shippers party to contract |
| Liability default | Carmack Amendment full-value liability | Carmack default plus negotiated contract terms |
| Application form | Form OP-1 (for-hire authority) | Form OP-1 (for-hire authority — same form) |
| Insurance minimum | $750K BMC-91X (property) | $750K BMC-91X (same minimum) |
When to operate as common carriage
Common carriage suits carriers serving a wide and unstable shipper base — drop-and-hook spot freight, load-board pickups, brokered loads from many different brokers. The carrier publishes (or accepts implied) rates and serves whoever calls. Most owner-operators on the spot market default to common carriage by behavior even when they have not formally articulated it.
The Carmack Amendment full-value cargo liability default applies. The carrier is on the hook for the actual value of the cargo unless a published tariff specifically limits it (§14706(c) released-rate options) — most carriers do not maintain such tariffs, so common carriage means full Carmack exposure.
When to operate as contract carriage
Contract carriage suits carriers with a small number of repeat shippers — dedicated contracts, regional retail accounts, named-shipper agreements. The contract spells out lanes, rates, equipment, transit times, and liability. The carrier and shipper negotiate terms once and operate under them across many loads.
Contract carriage allows the carrier to negotiate liability limits, payment terms, detention pay, and other commercial provisions that common-carriage tariffs do not. Most large fleet carriers operate primarily contract carriage for their dedicated accounts and supplement with common carriage for spot freight.
Frequently asked questions
Is the common-vs-contract distinction still on Form OP-1?
Largely no. The 1995 ICCTA collapsed the two authority types into a single "for-hire" motor-carrier authority on Form OP-1. The legal distinction still matters for tariff filing, rate-setting practice, and certain liability defaults under 49 USC §13702 — but the application is one form.
Which one offers better protection for the carrier?
Contract carriage gives the carrier more control over terms — the contract is privately negotiated and can vary load-by-load. Common carriage operates on published tariffs (or implied terms under §14101) and obligates the carrier to serve any shipper at the published rate. Most modern OTR carriers use contract carriage for repeat shippers and common carriage as a fallback.
Do brokers fall under common or contract?
Neither directly. Brokers operate under separate authority on Form OP-1(P), not Form OP-1. The common/contract distinction applies to the underlying motor carriers a broker tenders freight to, not to the broker itself.
Get for-hire authority — Form OP-1 covers both
One Form OP-1 ($300 FMCSA fee) covers common and contract carriage. FastTruckAuthority bundles the application with BOC-3 and authority package starting at $499.
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