What is the difference between a common carrier and a contract carrier?
In general commercial usage, a common carrier offers to haul for anyone who asks, on published terms. A contract carrier hauls only for the shippers it has signed an agreement with, on terms negotiated with each. A private carrier is the third type: a company hauling its own product in its own trucks.
In practice you see this at the tendering stage. A common carrier quotes you its published rate or tariff. A contract carrier quotes you off the agreement you signed, and may have no obligation to take a load you did not plan for.
Does the federal government still sort carriers this way?
Not in 49 CFR 390.5. 49 CFR 390.5 defines a for-hire motor carrier as “a person engaged in the transportation of goods or passengers for compensation,” and a private motor carrier as a person who provides transportation by commercial motor vehicle and “is not a for-hire motor carrier.” The words “common carrier” and “contract carrier” do not appear in that section.
So the federal line there is for-hire versus private. Common and contract describe how a for-hire carrier sells its service. That is a commercial and contractual label, which is why the answer to “what are we?” lives in your agreement.
How do the three types compare for a fuel supplier?
Except for the insurance row, this table describes general market practice, not rules from the regulations, so confirm it in your own paperwork.
| Common carrier | Contract carrier | Private carrier | |
|---|---|---|---|
| Who it hauls for | Any shipper, on published terms | Named shippers under a written agreement | Its own company only |
| Rate type | Tariff or published rate | Negotiated, set in the agreement | No rate; it is your cost of running trucks |
| Obligation to serve | Generally expected to take loads it holds itself out to carry | Only what the agreement commits it to | None to outsiders |
| Liability for the load | Set by the bill of lading and tariff terms | Whatever the contract says | Yours, as owner of the product and the truck |
| Hazmat tanker insurance minimum | Same federal floor as the others | Same federal floor | Same federal floor |
The last row is the one the label does not change: the federal minimum is the same for all three.
What insurance minimum applies to a fuel tanker?
49 CFR 387.9 sets the same public-liability floor for “For-hire and Private” carriers on its hazardous-materials rows. Entry (3), for oil and other listed hazardous materials in interstate commerce, or in bulk in intrastate commerce, on vehicles of 10,001 pounds or more, is $1,000,000. Entry (2) covers a narrower list of bulk hazardous substances at $5,000,000. For-hire carriage of nonhazardous property is $750,000.
Which entry your product falls under depends on its hazard class and how it is described on the shipping papers, so check the exact load with your insurer rather than assuming. Those are federal minimums. A shipper can require more in the contract, so ask for the certificate of insurance and compare it with what the agreement requires.
Which carrier type fits which lane?
Use this rule: the steadier and more repeatable the lane, the more it belongs under a contract carrier or your own trucks; the more irregular, the more it belongs with a common carrier.
Say you run a weekly 8,000-gallon delivery from one terminal to one farm account (illustrative numbers). That is a contract lane. You know the volume, you want the same driver and a fixed rate, and you can write it down.
Now say a customer calls for a one-off drop on a Friday, outside your normal territory. You will not sign an agreement for one load. A common carrier that takes ad hoc freight is the fit, and you pay its quoted rate.
| Lane | Best fit | Why |
|---|---|---|
| Same route every week | Contract or private | Predictable volume supports a negotiated rate |
| One-off or overflow load | Common | No agreement needed; quote and go |
| Steady, dense routes for your own jobber accounts | Private (your own trucks) | Control over timing and driver, at your own cost |
| Terminal you are not set up at | Whoever holds the carded terminal access | Loading requires it, whatever the label |
Most suppliers end up with a mix: a contract or private base for the lanes they can predict, and common carriers for the overflow. Treat the label as a starting point and read the actual terms before you tender a load.
Whichever you pick, price it per gallon so you can compare. Fuel hauling cost per gallon shows how, and how to compare bulk fuel quotes covers lining up quotes from different sources.
How Energy Connect handles it
Energy Connect is a load board. It is not a carrier and does not dispatch trucks. When a load is posted on Energy Connect, carriers can bid on it. The poster can accept or decline each bid. A bid quoted as a freight rate can also be countered; a bid priced off an index or terminal can only be accepted or declined.
Which kind of carrier you hire stays your decision, and the agreement stays between you and that carrier.