If you have any question about this common freight term – carrier; you will find the answer right here.
This guide explores every information you’d wish to know about carrier, from basic definition, services, rates and classification, among other vital aspects.
So, keep reading to learn more.
- What is a Carrier in Logistics?
- What is the Role of Carriers in Shipping?
- What is the Difference Between Carrier and Shipper?
- How Many Types of Carriers Are There?
- What Services do Freight Carriers Offer?
- Which Industries Benefit from Carrier Services?
- Who is the Carrier in a Bill of Lading?
- What is the Difference Between Carrier and Freight Forwarder in Logistics?
- What is a Carrier Facility in Shipping?
- Is there a Difference Between Shipping Line and Carrier?
- Can you consider NVOCCs as carriers?
- How Does your Choice of Carrier Influence Shipping?
- How Much does a Carrier cost?
- Do Carrier Fees Include Fuel?
- How are Carrier Rates Determined?
- Do Carriers Charge Accessorial Charges for Shipping?
- Why do Carrier rates Change Every So Often?
- Which Payments Methods do Carriers Accept for Freight Charges?
- What is the Difference Between Courier and Carrier?
- Do Freight Carriers Provide Insurance during Shipping?
- Are Carriers Liable for Damaged, Lost or Stolen Goods During Shipping?
- What is Carrier Compliance?
- What is the Relationship BetweenFreight Carriers and Freight Brokers?
- Do Freight Carriers Provide Tracking Services?
- How do Carriers Classify Freight During Shipping?
- Do all Carriers Ship Hazardous Material?
- What is Carrier Selection?
What is a Carrier in Logistics?
A carrier refers to an individual who has the legal permission to transport cargo via land, air and water.
They usually serve the purpose of a shipper from one point to another.
What is the Role of Carriers in Shipping?
The role of carriers in shipping include:
- Taking over the shipment.
- Preserving the shipment from damage during transportation.
- Transportation of the shipment to its destination using the most appropriate means of transportation.
Dry bulk carrier
What is the Difference Between Carrier and Shipper?
A carrier refers to any individual or company who performs the purpose of transporting goods in a contract of carriage from one point to another.
On the other hand, a shipper is an individual or company who owns or serves as the goods’ supplier to be shipped from one point to another.
Carriers vs shippers
How Many Types of Carriers Are There?
- Common carrier: this is a provider of transport that gives their services to any individual or company because of the legal permission.
A common carrier can work with many shippers in a day as they do not have a binding contract.
- Contract carriers: this is an individual or company that gives transport services to a specified shipper for a long duration.
This agreement between the shipper and carrier is bound by a long-term agreement contract between the parties.
- Local carriers: this consist of most of the trucking industry and almost sixty per cent of all carriers who use motors.
They can provide service to limited areas.
- Regional carriers: these have more trucks and larger fleets, and they serve in vaster areas.
- National carriers: these are the largest carriers available in the market.
- Private carriers: these transport freight on the shipper vehicles and therefore do not charge additional fees.
- For hire carriers: these can transport general freight and thus charge additional fees for service.
Types of carriers
What Services do Freight Carriers Offer?
Services offered by freight carriers include:
- Warehousing: freight carriers know how to handle different types of goods by either owning their warehouses in various locations.
- Offering advice to the shipper: freight carrier advises and helps clients move cargo more efficiently from one point to the destination.
In case of any possible changes in freight transportation, they inform the client in advance.
- Booking freight space on the mode of transport to be used: freight carriers help shippers by booking cargo space on trains, aeroplanes, ships, trains, or other means of transport.
- Provision of shipping options like road haulage, containerization, and air freight.
- Packing: the freight carrier organizes shipment packaging before it is dispatched for transportation to protect it from damage.
- Distribution: they assist in the delivery of the cargo to the shipper’s destination.
- Cargo insurance: freight carriers may at times organize for insurance of cargo depending on the contract of agreement.
This will ensure the security of the goods in case they are damaged or lost while in transit.
- Documentation and customs clearance: the freight carrier organizes and delivers documentation to import and export goods.
They also ensure these documents meet the custom requirements and the contract agreement between them and the shipper.
Which Industries Benefit from Carrier Services?
Some of the industries that benefit from carrier services include:
- Food and drink.
- Plastic and resin.
- Pharmaceutical and healthcare.
- E-commerce and retail.
- Transportation service and trade show.
- Aerospace and defence industry.
- Industrial supplies and produce.
- Sensitive deliveries and specialty Duties of a common carrier include:
- Carrying goods safely: a common carrier has the duty of transporting goods safely up to the destination.
In case there is loss or damage on the way, the carrier will be responsible.
- Acceptance of goods: the common carrier has the obligation of accepting the goods from any individual that would like their goods to be transported.
- Usage of the common route: the common carrier can transport the goods using the general route.
The carrier should not engage the shortest route in transportation and should also treat ordinary circumstances.
- In time delivery: the common carrier has the duty of delivering the shipment within the time agreed upon in the carriage contract.
- Obedience of instructions: the common carrier should honour the sender’s instructions concerning the transportation of goods.
- Delivering to the right person: it is the duty of common carrier to ensure that the shipment is handed over to the right person.
In case the shipment is delivered otherwise; the common carrier will be held responsible.
- Proper place: the common carrier must ensure that the goods are delivered to the right place specified in the contract.
Who is the Carrier in a Bill of Lading?
In a bill of lading, the word carrier includes the company named the carrier on the bill of lading, the defined vessel, and the owners and operators.
This term also includes the demise and time charterers, any substituted or connecting carriers.
It also constitutes any time engaged individual or charterer to the extend bound by the bill of lading whether they serve as the carrier or Bailee.
The carriage of the goods is regulated by all the terms and tariff provisions by the governing bodies.
Copies of the necessary provisions can be obtained from the carrier when requested.
The carrier has the responsibility of ensuring port to port shipment and combined transport.
What is the Difference Between Carrier and Freight Forwarder in Logistics?
When shipping internationally, businesses have the challenge of deciding whether to use an international freight forwarder or work directly with a transportation carrier.
Some of the differences between carrier and freight forwarder include:
- Shipping documentation: Carriers issue their bill of lading which may or may not be based on a given global standard but the agreement contract.
On the other hand, Freight forwarders must issue a bill of lading which id based on standardized documentation.
- Specific role: carriers serve as middlemen and oversee the shipper’s cargo’s transportation up to the destination.
Freight forwarders, on the other hand, serve more like an agent to the shipper.
- A carrier is a shipping line while a freight forwarder is not a shipping line.
This is because you can book a carrier directly with a shipping line while for freight forwarder, you need to book them through as a forwarder.
- Containers: freight forwarders do not own any shipment equipment while most carriers own and operate their shipping containers.
What is a Carrier Facility in Shipping?
A carrier facility refers to a large warehouse used to keep packages ordered by people for a specific geographical location.
Carrier facilities are owned by different brands which can carry packages.
Some of the carrier facilities may be very large warehouses possessing fleets of delivery trucks whereas others may be small retail facilities in the front.
It will depend on the coverage area, a few square miles or even entire countries.
Packages can pass via one carrier facility, or they may pass through a few different carrier facilities.
Is there a Difference Between Shipping Line and Carrier?
In many cases, they are the same thing, but also, there are differences between shipping line and carrier.
In the simplest terms, a carrier referred to as a shipping line is an individual or company that performs transport functions for a shipper.
The carrier can carry the cargo using either sea, road, rail, inland waterway or even a combination of these modes.
Nowadays, there are agreements of sharing vessels, consortium, and alliances within the shipping industry.
It has led to various parties in the shipping industry, in terms of ship operation, container service and line service.
In such alliances of shipping lines, all lines may be running vessels of their own but based on a liner schedule which is fixed.
Each shipping line will have to share vessel space, and the number of vessels usually determines this operates by each shipping line.
In this case, each of the shipping lines will load and discharge cargo according to the agreed-upon schedule irrespective of whether they own the ship or not.
This will call for agents to act as vessel agents and carrier agents.
The functions of the vessel agent will include:
- Coordination with partner lines concerning their cargo details, size, weights, types or hazardous for finalization of stowage plan.
- Liaising with port authorities to ensure that the vessel berths on time, starts and completes cargo operation
- Operation of the vessel.
In case a carrier serves as a vessel agent; their operation division will have to handle the vessel side while the commercial division handles the carrier agent side.
The carrier agent will have to handle the following commercial activities:
- Cargo booking.
- Issuance of their bill of lading.
Because the shipping lines will be giving their bill of lading for the shipment loaded under their control, they will be responsible for any damages.
Can you consider NVOCCs as carriers?
Yes, you can consider NVOCCs as carriers because they act as middlemen and make one hundred percent work for shippers.
NVOCC stands for Non-Vessel-Operating Common Carrier.
It is usually issued its bill of lading which at times may not be based on any global standards.
However, it is difficult to establish how many NOVCCs are operating worldwide because any regulatory body does not govern them.
Before the provision of service, NVOCC is required to meet the following:
- Secure a license from the FMC.
- Publish a tariff about charges that willapply to clients.
- Provide proof of financial responsibility in case payment is required for any claims that may occur.
The client list of NVOCCs may include:
- Clearing agent
- Freight forwarder
- Freight broker
How Does your Choice of Carrier Influence Shipping?
Some of the factors to consider when choosing a shipping carrier include:
- Type of products: when choosing different carriers, it is important to carefully examine the shapes, sizes, and services they offer to ascertain the best choice.
- Location: If you would like to ship both locally and internationally, you must select a carrier that will meet both functions.
- Cost, time, and quality: pricing will greatly influence a carrier’s choice as it is important to choose a carrier you can afford.
It is essential to consider the quality and the delivery time and the cost of the carrier.
- Reliability: it is important to establish if the carrier is reliable to assist you in building the company’s reputation.
A reliable carrier will ensure that your cargo reaches its destination on time as promised.
- Services offered: it is advantageous to do business with a carrier who offers multiple services and can effectively meet your company’s needs.
- Safety: Safety of a company’s product is a key consideration; therefore, when selecting a carrier, it is important to select one that has a safe reputation.
- Sustainability: when doing international shipping, it is important to establish if the carrier follows sustainable practices.
Customers also pay close attention to the environment’s sustainability.
- Carrier stability: selecting a stable carrier in the market and has been doing business for long is important to your business’s long-term functioning.
It will not be economical to ship cargo at a lower price using a carrier that is not stable in the market.
- Asset versus non-asset-based carriers: asset-based carriers tend to have all the necessary equipment for transporting your cargo, unlike the latter.
It is important to choose asset-based carriers to minimize the hands that handle your freight, thus minimum room for errors during shipping.
- Insurance: it is important to know that not all carriers provide insurance of cargo despite it being an important feature in international shipping.
Therefore, it is important to select a carrier that provides insurance to have peace of mind.
How Much does a Carrier cost?
Different carriers tend to have different rates for shipping cargo depending on the following factors:
- Service mix
- Weight and zone distribution
- Destination points
- Dimensional weight
- Carrier perks
- Other factors: include
- Shipments that require special packaging.
- Declared value.
- Additional handling.
- Special pickups
- Oversize shipments.
- Maximum shipments.
- Dangerous goods.
- Signature requirements for delivery.
The key consideration in pricing is establishing how the fees you are incurring aligns with the actual costs being incurred by carriers.
After determining this, you should negotiate accordingly.
Do Carrier Fees Include Fuel?
Yes, carrier fees include fuel, and this is charged on top of the basic shipping rates.
These fuel surcharges are put in place to assist carriers in taking care of the costs that are related to fuel.
These costs are put in place due to the constant fluctuation in fuel prices.
These fees are determined weekly depending on the fuel price report compiled by the Energy Information Administration.
Most carriers tend to use these rates using a calculator for fuel surcharges to determine the additional charge to impose.
This offers protection to their bottom lines.
If you consistently ship large volumes of cargo, you may negotiate with the carrier for a flat rate for shipments to curb these surcharges.
How are Carrier Rates Determined?
The actual price that one pays depends on various factors, many of which directly relate to the shipment.
The main factors determining the rates of carriers include:
- Weight of the cargo.
- Truck freight rates.
- Size of the cargo.
- Mode of transport.
- Distance to be covered.
- Points of pickup and delivery points.
- The actual goods to be shipped.
- Handling costs.
- Type of cargo.
Each of the above factors plays an independent role in establishing carrier rates, and they also relate to each other.
Do Carriers Charge Accessorial Charges for Shipping?
Yes, carriers charge accessorial charges for shipping.
An accessorial charge refers to a fee which is added to the freight invoice of a shipper.
This fee is for services which the carrier carried out beyond that agreed upon in the agreement contract.
Accessorial charges cater to services rendered past the pickup and delivery operation established when the shipment was made.
They tend to cover many services provided beyond the fuel surcharge and the line haul charge concerning cargo transportation.
These changes manifest in a variety of forms and affect all modes of transport services available.
Some charges may be one-time incurrence while others may accelerate daily until a solution to the situation is found.
Some of the top accessorial charges include:
- Yard Pulls.
- Advanced Notification.
- Driver Count.
- Driver Clean.
- Hazardous Materials.
- Inside Delivery.
- Limited Access Fee.
- Sort / Seg.
- Stop Off Charge.
- Truck Order Not Used (TONU).
- Bill of Lading (BOL) Correction Fee.
- Driver Assist.
- Misuse Charge.
- Out of Route Miles.
- Oversized / Overlength.
- Per Diem.
- Pool Setup or Teardown.
- Reclassification & Reweigh.
Example of an accessorial charge sheet
Why do Carrier rates Change Every So Often?
Carrier rates change every so often due to the following factors:
- Bunker fuel costs: this refers to a floating cost which the carrier varies depending on the fuel prices; when they rise and fall.
- Market demand: carriers tend to raise their rates during the peak seasons due to the increased demand.
They lower the prices during off-peak seasons because of decreased demand.
- Terminal costs: when terminal costs rise due to congestion issues, carriers tend to increase their rates.
Which Payments Methods do Carriers Accept for Freight Charges?
Some of the payment methods that carriers use for freight charges include:
- Wiring money straight from the shipper through an international transfer.
- Opening an account and making a local transaction.
- Use of Alipay or Alibaba Trade Assurance.
- Transfer of funds through western union.
- Use of pay pal.
What is the Difference Between Courier and Carrier?
Courier services are used in the transportation of small shipments while carriers are mainly used in moving large shipments from one point to another.
Courier service is used in shipments of between one and 15 boxes depending on the location, weight and volume.
Carriers, on the other hand, are used to ship any cargo which exceeds 150 lbs.
Courier services use door to door method of delivering cargo to individuals.
Due to their large shipments, carriers need larger trucks with specialized equipment and loading and unloading sites.
Carriers do not deliver cargo as quickly as courier services, but they are the most economical and help cut costs.
Do Freight Carriers Provide Insurance during Shipping?
Not all freight carriers provide cargo insurance when shipping goods.
However, you must select a carrier who gives cargo insurance to ensure that your goods are protected from loss or damage.
Insurance will ensure that goods are safe when stored, when in transit up to the final destination.
Are Carriers Liable for Damaged, Lost or Stolen Goods During Shipping?
Carriers may or may not be liable for damaged, lost or stolen goods during transportation depending on carriage contract.
These types of contracts include:
- Contract of carriage at the owner’s risk: under this, the carrier will not be liable for the goods damaged, lost or stolen during shipping.
The only exception will be in case the loss or damage was caused by the carrier intentionally.
- Contract declared value risk: in this, the carrier will be liable for the goods damaged, lost or stolen during shipping up to an amount stated in the contract.
- The contract for limited carrier’s risk: the carrier’s liability for goods lost, damaged or stolen will be up to a certain amount.
- Contract on declared terms: the liability of the carrier for goods stolen, lost or damaged during shipping will be according to a specified term in the contract.
In the case there is no contract between the shipper and the carrier, then the default solution will be a contract having a limited risk on the carrier.
What is Carrier Compliance?
Carrier compliance is whereby a carrier meets the required legal requirements of operation and possesses the right level of insurance.
This will ensure that their customers are protected from any financial harm and are safe to work with professional drivers and dispatchers.
Shippers have a critical concern to ensure that the carrier meets compliance requirements to avoid:
- Financial repercussions.
- Delays in fulfillment of orders.
- Out of stock warehouses
- Perished freight
- Damaged freight.
Some of the benefits of carrier compliance include;
- Ensures a quality partnership between a carrier and a shipper and eliminates elements of unwanted distrust.
- Protects the assets of a company.
- Maintains the image of a company.
- Lowers the costs of a shipper’s company while at the same time offering guaranteed quality.
- Creates a safe environment for shipping.
- Builds enhanced visibility on all the information and data required.
What is the Relationship BetweenFreight Carriers and Freight Brokers?
Freight carriers refer to an individual or business which runs a fleet of trucks and transports your goods from one point to another.
These carriers have ownership of the trucks, and they make payments to drivers and take care of scheduling and dispatch.
In the areas that they operate, fright carriers tend to possess coverage; thus, it is possible to track progress.
In case of any issues during shipment of cargo, they are addressed through the freight carriers.
On the other hand, Freight brokers do not possess any equipment for shipping and do not operate trucks.
They also do not have coverage in the areas they operate, and mostly they serve as brokers for the freight carriers.
The freight broker’s main job is to link up freight carriers with shipments because they are well-versed.
They are well aware of the routes, terminals, and areas of coverage and thus assist in faster cargo movement between points.
They assist carriers in dealing with tracking shipment issues and customer service issues that may arise during goods transportation.
Freight carriers are more appropriate when making a single shipment with a single drop point and fill up the vessel space.
In case you have multiple shipments, which do not c=occupy the entire space, then a freight broker comes in handy.
Before choosing a carrier, it is important to ensure that your cargo is well packed and ready to be transported.
Do Freight Carriers Provide Tracking Services?
Yes, freight carriers do provide tracking services, and this grants a sense of assurance to both the carrier and the shipper of safe and timely arrival of cargo.
Technology improvement is easier and accurate to track shipments using even your computer or phone.
Some companies who do shipping tend to use other different methods of tracking like:
- Bill of lading.
- Progressive Number.
- Shipment number.
- Purchase order number.
- Shipment reference number.
Some of the benefits of freight shipment tracking include:
- Reduction of customer anxiety.
- Gives delivery information.
- Increases transparency.
- Decreases customer service demands and costs.
- It assists in the easier location of a lost package.
How do Carriers Classify Freight During Shipping?
The main purpose of carriers classifying freight is to determine fair means to use to standardize freight pricing.
Freight classification is determined by several factors which include:
- The ease of handling the goods or whether special equipment is needed.
- Liability associated with the cargo putting into consideration how hazardous or valuable the cargo is.
- The fright’s density.
- Storability of the cargo; the ease of storing the goods and maintain them in good condition during transportation.
When selecting a carrier, it is very important to choose one that is well aware of freight classifications.
This is because the changes in classification can be expensive.
The shipping company should assist you in the quick determination of the classification of your freight.
Many organizations use freight calculators to answer the classification and the cost to be paid.
The major determinant of freight classification is density, which refers to the weight of a good for a given volume.
In the United States, freight companies establish the freight’s class by measuring its density in pounds per cubic foot.
Freight that weighs less than a pound per cubic foot is classified under 400 class freight.
That which weighs less than two pounds per cubic foot is classified under 300 class freight.
The number of the freight’s class tends to drop as the density increases.
For those goods which weigh above thirty pounds per cubic foot, the class of freight is sixty.
Do all Carriers Ship Hazardous Material?
No, not all carrier is willing to ship hazardous materials.
Besides, some carriers may completely refuse to transport cargo which is not on the official list, which they believe may pose a danger in their operational activities.
Therefore, it is essential to know whether the carrier company ships hazardous material or not depending on what you want to transport.
Some carriers ship hazardous materials, but it is important to have all the governing bodies’ approval materials.
This sill also makes the carrier aware of the types of hazardous materials you want to move and the preventive measures required.
Types of hazardous materials include:
- Poisonous gas.
- Radioactive materials.
What is Carrier Selection?
Carrier selection is the process of having multiple carriers choose from to lower your products’ shipping costs.
The main reasons why you require carriers to choose from include:
- Consumers always demand more options and choices as they are not satisfied with standard shipping nowadays.
- The sizes and delivery requirements of e-commerce may vary.
- Different carriers tend to offer different levels of service.
- More carriers bring about more rates which are competitive.
- Carriers may not provide open-ended services.
- Interlining is very important to e-commerce globalization.
- Availability and increment in shipping lanes.
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From booking spaces in ships, warehousing, transportation to custom clearance – we will make the entire shipping process easy and simple.
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