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Comparison

Common carrier vs contract carrier

Short answer

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 ICC Termination Act of 1995, both file the same Form OP-1 for-hire motor-carrier authority under 49 USC §13902 and pay the same $300 application fee per §13908 - the operational distinction still matters for rate-setting practice, liability allocation, and tariff publication. Common carriers historically owed a higher duty of care under common-law carriage rules; contract carriers operate under negotiated terms and customary commercial-contract liability. Both types must maintain liability coverage filed on Form BMC-91 or BMC-91X under 49 CFR §387.9, file a BOC-3 process-agent designation under §366.4T, and run drug/alcohol testing programs under 49 CFR Part 382. Many shippers require carriers to specify common or contract status in master service agreements.

Reviewed by Korey Sharp-Paar · Updated

Side-by-side comparison

DimensionCommon CarrierContract Carrier
Customer baseOpen to any shipper at published ratesLimited number of specific shippers under contract
Rate practicePublished tariff or implied 49 USC §14101 obligationsPrivately negotiated rates per contract
Service obligationMust serve any shipper at the published rate (subject to capacity)Only required to serve shippers party to contract
Liability defaultCarmack Amendment full-value liabilityCarmack default plus negotiated contract terms
Application formForm 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 broker authority (49 USC §13904), not motor-carrier authority. The common/contract distinction applies to the underlying motor carriers a broker tenders freight to, not to the broker itself.

Related comparisons

Get for-hire authority - Form OP-1 covers both

One Form OP-1 ($300 FMCSA fee) covers common and contract carriage. We prepare your USDOT number and MC operating-authority application; it is submitted to FMCSA in Motus by you or a filer you authorize. FMCSA charges a $300 application fee for each operating authority type (49 CFR 360.3T); a USDOT number is free. Our $199 service fee and the $300 FMCSA fee are itemized as two separate amounts before you pay ($499 total).

Start your application — $199 service fee + $300 FMCSA fee MC authority overview

Submitted to FMCSA in Motus by you or a filer you authorize.

Independent filing service operated by Fast Filing Group LLC. Not affiliated with FMCSA, USDOT or any government agency.

Informational only - not legal advice.

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