Common Carrier vs Contract Carrier vs Private Carrier

Common carrier, contract carrier, private carrier. The terms get used loosely, but they describe three genuinely different ways of running trucks. Knowing which one you are helps with authority, insurance, and paperwork. Here is the difference, and the one thing that is the same for all three.

What is a common carrier?

A common carrier offers transportation to the general public for hire. If you can call them, book a load, and pay them to move it, they are acting as a common carrier. Because they serve the public, they carry operating authority and the insurance that goes with it, and they take on legal duties to the shippers they serve.

What is a contract carrier?

A contract carrier hauls freight for a limited set of customers under ongoing contracts rather than for the general public. In practice the federal government has combined common and contract operations into a single for hire motor carrier authority, so the difference today is mostly about how the business relationship is set up rather than a separate license.

What is a private carrier?

A private carrier moves its own goods as part of its own non transportation business. A retailer delivering its own stock, or a manufacturer moving its own parts between plants, is a private carrier. It is not selling transportation, so it usually does not need for hire operating authority. It can still need a USDOT number and must follow safety rules when it crosses state lines and meets the thresholds.

Do you need operating authority for each type?

For hire carriers, common and contract alike, generally need operating authority, an MC number, and specific insurance filings to move other people's freight for pay across state lines. Private carriers moving only their own goods usually do not need for hire authority, though they may still need a USDOT number. When in doubt, confirm your situation with the federal motor carrier agency.

Does carrier type change the Heavy Vehicle Use Tax?

No. This is the part that is identical for everyone. The Heavy Vehicle Use Tax looks only at the truck's taxable gross weight and its highway use. A common carrier, a contract carrier, and a private carrier that each run a truck at 55,000 pounds or more all file Form 2290 and owe the same tax. Your business model does not enter into it.