Private Carrier

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.

RELATED TERMS
  1. Common Carrier

    A commercial entity that gets paid to transport goods or people. ...
  2. Transportation Sector

    A category of stocks relating to the transportation of goods ...
  3. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named ...
  4. Carmack Amendment

    An amendment to the Interstate Commerce Act of 1877 that limits ...
  5. Uniform Bill Of Lading

    An agreement between an exporter and a carrier regarding property ...
  6. National Motor Freight Traffic ...

    A nonprofit organization representing interstate, intrastate, ...
Related Articles
  1. Investing

    What does Free Carrier Mean?

    Free carrier is a trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer ...
  2. Stock Analysis

    Keep Your Portfolio Truckin’ With The Transports

    With the U.S. really beginning to move forward, investors may want to focus on another main Dow index- The Dow Transports.
  3. Forex

    Global Transportation: Exploring Revenue Trends and Fundamentals

    Explore the geographic trends in global transportation sector revenues, and discover the factors that influence revenue contribution and growth in this area.
  4. Stock Analysis

    3 Ocean-Going Bulk Dividend Carriers

    Shipping stocks are making waves as the global economic recovery continues.
  5. Mutual Funds & ETFs

    Top Three Transportation ETFs (IYT, XTN)

    These three transportation funds attract the majority of sector volume.
  6. Fundamental Analysis

    Global Transportation: 3 Key Industry Players (BRK-A, AAL)

    Get information on some of the leading publicly-traded companies worldwide that are major players in the transportation industry.
  7. Mutual Funds & ETFs

    Top 4 Transportation Mutual Funds

    Discover the top-rated mutual funds in the transportation industry, and understand how investors can position these funds in their asset allocation.
  8. Stock Analysis

    The Shape Of Dry Bulk Shipping

    With the global economy recovering, is it time to set sail with shipping companies?
  9. Investing

    Major Companies That Lose Money On Shipping (AMZN)

    We look at some of the big companies in the home delivery business that have high shipping costs and how they mitigate this.
  10. Stock Analysis

    Transportation Growth Strengthens CP Railway

    As the transportation industry gains momentum, so does Canadian Pacific's growth.
RELATED FAQS
  1. What kinds of costs are included in Free on Board (FOB) shipping?

    Find out about free on board shipping, the obligations of parties involved and the costs parties must assume in free on board ... Read Answer >>
  2. When should I send my master Bill of Lading?

    A master bill of lading firms up the shipment details between the shipper of goods and the transportation provider or the ... Read Answer >>
  3. I have lost my original Bills of Lading. Can I obtain a new set?

    Find out why an original bill of lading cannot be replaced if it is lost or stolen and how a court order must be obtained ... Read Answer >>
  4. What is the distinction between Free on Board (FOB) shipping point and destination?

    Find out more about free on board shipping point and free on board destination and the difference between these international ... Read Answer >>
  5. What are the differences between Ex Works (EXW) and Free On Board (FOB)?

    Learn about Ex Works and Free on Board, the main difference between these Incoterms, and the responsibilities of buyers and ... Read Answer >>
  6. How is the Dow Jones Industrial Average used in the Dow theory?

    Discover how the Dow Jones Industrial Average is used in the Dow Theory, which is used by traders to figure out the trend ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center