Trucking Industry Definitions for Everyone to Understand
From Big Rig Insurance Programs
If you’re working in or starting out in the trucking industry, you may notice that government forms and regulations use terms that might not match what you hear day-to-day. For example, what most people call a “trucker” or a “trucking company” is officially referred to as a “motor carrier” or just “carrier” in federal government language. This guide simplifies key definitions to help you confidently fill out forms and understand the requirements.
When we say “company,” we mean anyone—whether an individual, partnership, or corporation—engaged in trucking activities. The Federal Motor Carrier Safety Administration (FMCSA) oversees these activities, and they’re located at 1200 New Jersey Avenue SE, Washington, DC 20590.
Motor Carrier
A motor carrier is simply a company (or person) that provides truck transportation. Motor carriers fall into two categories:
- Private Carrier
- What it means: This is a company that uses trucks to haul its own goods.
- Example: A furniture store that uses its own trucks to deliver sofas to customers.
- FMCSA Requirement: Must register by filing a Form MCS-150 if operating across state lines.
- For-Hire Carrier
- What it means: A company that gets paid to transport goods for others.
- Example: A trucking company hired to move products for a grocery chain.
- FMCSA Requirement: Must register with a Form MCS-150 and a Form OP-1 if operating across state lines.
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For-Hire Carriers: Common vs. Contract
For-hire carriers can be divided into two types, though the differences are historical and less relevant today:
- Common Carrier
- Before 1996: Provided trucking services to the general public at publicly listed rates.
- Today: Must provide proof of cargo insurance to FMCSA.
- Contract Carrier
- Before 1996: Provided trucking services to specific shippers under private contracts.
- Today: Does not need to file proof of cargo insurance.
Important Note: On FMCSA’s Form OP-1, you’ll still be asked to select either “common carrier” or “contract carrier.” This distinction remains mostly for legal purposes.
Freight Forwarder
- What it means: A company that helps organize and manage the shipment of cargo for others.
- Key Role: Freight forwarders take responsibility for the cargo from start to finish, often combining smaller shipments into larger ones for efficiency.
- Example: A forwarder collects smaller packages from multiple clients, combines them into one truckload, and coordinates delivery to final destinations.
- FMCSA Requirement: Must register by filing a Form OP-1 (FF).
Broker
- What it means: A company that connects shippers (people or businesses needing to move goods) with carriers (the truckers or trucking companies doing the hauling).
- Key Role: Brokers handle the logistics but don’t take possession of or responsibility for the cargo.
- Example: A broker finds a trucking company to deliver a manufacturer’s goods to a retailer.
- FMCSA Requirement: Must register by filing a Form OP-1.
Key Takeaway
This simplified guide focuses on making complex regulations easier to digest. If you’re filling out forms or deciding what type of trucking business to start, these definitions should help you navigate the process. However, if you’re unsure or face unique situations, consulting a legal expert is always a good idea.
This guide is brought to you by Big Rig Insurance Programs to help empower trucking professionals with clarity and confidence!
Motor Carrier: A company that provides truck transportation. There are two types of motor carriers, private carriers and for-hire carriers. To operate as an interstate motor carrier, either as a private or as a for-hire carrier, a company must register with FMCSA by filing a Form MCS-150.
Private Carrier: A company that provides truck transportation of its own cargo, usually as a part of a business that produces, uses, sells and/or buys the cargo being hauled.
For-Hire Carrier: A company that provides truck transportation of cargo belonging to others and is paid for doing so. To operate as an interstate for-hire carrier, a company must also register with FMCSA by filing a Form OP-1. There are two types of for-hire carriers, common carriers and contract carriers. A for-hire carrier may be both a common and a contract carrier, but must file separate registrations to obtain both licenses.
Common Carrier: Before January 1, 1996, this was a company that provided for-hire truck transportation to the general public. The services offered and the prices charged were published in a public tariff and these were the only prices the common carrier could charge.
Contract Carrier: Before January 1, 1996, this was a company that provided for-hire truck transportation to specific, individual shippers based upon private contracts between the carrier and each shipper, stipulating the services offered and the prices charged to each.
Selecting “Common” or “Contract”: The OP-1 form requires an applicant to designate whether it is registering as a “common carrier” or a “contract carrier.” The historical difference between these two types is reflected in the definitions immediately above. The ICC Termination Act of 1995 defines contract carriage as truck transportation provided under a contract, but, effective January 1, 1996, it no longer distinguishes between common or contract carriers. However, the Act specifically authorizes FMCSA to continue registering applicants as either common or contract carriers. The current principal distinction between the two types is that common carrier applicants must file proof of cargo insurance while contract carrier applicants are not required to do so.
Freight Forwarder: A company that arranges for the truck transportation of cargo belonging to others, utilizing for-hire carriers to provide the actual truck transportation. The Forwarder does assume responsibility for the cargo from origin to destination and usually does take possession of the cargo at some point during the transportation. Forwarders typically assemble and consolidate less-than-truckload (LTL) shipments into truckload shipments at origin and disassemble and deliver LTL shipments at destination. Forwarders must register with FMCSA by filing a Form OP-1 (FF).
Broker: Also a company that arranges for the truck transportation of cargo belonging to others, utilizing for-hire carriers to provide the actual truck transportation. However, the Broker does not assume responsibility for the cargo and usually does not take possession of the cargo. Brokers must register with FMCSA by filing a Form OP-1.
These trucking definitions are simplified for easier understanding by the persons required to fill out the above-referenced forms. Legally acceptable definitions of these activities would be longer, more complex, and supported by the results of many administrative proceedings, court decisions and judicial opinions. If there is any question about the applicability of these simplified definitions, a legal authority should be consulted.
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