Certified Supply Chain Professional (CSCP) Practice Exam

Which type of carrier is known for providing lower rates than common carriers?

1. Common/public carriers

2. Private carriers

3. Contract carriers

4. Exempt carriers

The correct answer is: Contract carriers

Contract carriers are known for providing lower rates than common carriers because they operate under specific agreements or contracts with individual shippers. These contracts often allow for negotiated rates and terms that can be more favorable than the standard rates offered by common carriers, which must provide services to the general public at published rates without negotiations. Contract carriers can tailor their services to meet the unique needs of their clients, which can result in cost savings. This flexibility in pricing and service can lead to lower overall shipping costs, especially for businesses that require regular shipments or have specific logistical needs. Common carriers, by contrast, are required to serve all customers on a first-come, first-served basis, which limits their ability to offer tailored pricing. Private carriers operate their own transportation vehicles exclusively for their own goods, while exempt carriers have specific exemptions from regulations and may not be subject to the same pricing structures. Understanding these distinctions is crucial in logistics and supply chain management to effectively manage transportation costs.