DEFINITION of 'Private Carrier'
A company that owns the vehicles used to transport its own goods. A private carrier does not transport goods as its primary business, and thus does not have to transport the goods of other companies like a common carrier. In this sense, a private carrier is not a for-hire carrier and does not carry other the goods of other companies as its primary business.
BREAKING DOWN 'Private Carrier'
Companies may wish to invest in their own transportation fleets for a variety of reasons. They may find the price of contracting out transportation to be too expensive for the volume of goods shipped, or for the final destinations that the goods have to be shipped to. The company may also worry about the reliability of transportation that it does not own, or that it won’t have transportation options available when needed if it relies solely on contract carriers.
Some companies that own their own transportation fleets may use contract carriers in certain situations, such as when a large amount of goods need to be shipped but all its vehicles are in use. For example, a retail store may expect to make a large number of shipments during the holiday season, and will use contracted truckers to add to its capacity so as to ensure that deliveries are made on time.
Trucks are the most common method of transport associated with private carriers, though large businesses may also operate their own aircraft or ships. This is most likely related to the cost of aircraft and ships, the types of goods the company deals in, and the destinations that it ships to.
Because private carriers primarily ship their own goods they can use the livery of the vehicle for advertising purposes. For example, a beverage delivery truck transporting a company’s soft drinks may always be painted a bright color and show large pictures of its offerings, thus serving as a mobile reminder to consumers that the company sells its product in their town.