Carrier Agreement
Also known as: Shipping Contract, Carrier Contract, Transportation Agreement
Definition
A carrier agreement is a formal contract between a shipper (or shipper’s agent) and a carrier that defines the terms of their shipping relationship. It establishes pricing, service commitments, liability, and other conditions governing how shipments will be handled.
Key Agreement Components
Pricing
- Base rates by service level
- Dimensional weight factors
- Discount percentages from list rates
- Surcharge caps or waivers
- Volume incentives and tiers
Service
- Pickup commitments
- Transit time guarantees
- Delivery windows
- Holiday schedules
- Service area coverage
Terms
- Agreement duration
- Volume commitments (if any)
- Payment terms
- Termination clauses
- Renewal provisions
Liability
- Declared value limits
- Claims procedures
- Liability caps
- Insurance requirements
Types of Carrier Agreements
| Type | Volume Required | Discount Depth |
|---|---|---|
| Standard | None | Published rates |
| Volume discount | Moderate | 10-30% off |
| Negotiated contract | High | 30-50%+ off |
| Enterprise | Very high | Custom pricing |
Negotiation Tips
- Know your data - Understand your shipping profile
- Get multiple quotes - Create competitive pressure
- Negotiate surcharges - Often overlooked
- Consider total cost - Not just base rates
- Build relationships - Long-term partnerships help
- Review annually - Renegotiate as volume changes
Common Agreement Pitfalls
- Minimum volume commitments you can’t meet
- Short termination notice periods
- Auto-renewal without rate locks
- Limited service guarantees
- Vague exception handling
Working with Multiple Carriers
Benefits of multi-carrier strategy:
- Negotiating leverage
- Service redundancy
- Mode optimization
- Geographic coverage
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