GlossaryEN1 min readUpdated: Jun 23, 2026
Contract Carrier Agreements
When a shipper or freight forwarder needs capacity on specific lanes on a recurring basis, contract carrier agreements become the instrument of choice.
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Source: https://www.investopedia.com/terms/c/contract_carrier.asp
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Definition & Explanation
When a shipper or freight forwarder needs capacity on specific lanes on a recurring basis, contract carrier agreements become the instrument of choice. These contracts set binding commitments on service levels – routes, schedules, on-time performance targets – alongside pricing structures such as volume-based rates, flat fees, or hybrid models, and liability provisions for loss or delay. For the shipper, the primary benefit is secured capacity even during peak periods; for the carrier, it means predictable utilisation and a stable revenue base. Contract terms typically run one to three years, with agreed minimum volumes or shipment quotas. Contract carriers differ from common carriers, who offer services to the general public without dedicated commitments, and from the spot market, where capacity is sourced short-term at prevailing rates.
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