Trailer Interchange Agreement

AAA

DEFINITION of 'Trailer Interchange Agreement'

A contract that arranges the transfer of a trailer to a second trucker so that the trailer can be delivered to its final destination, or until it can be transferred to another trucker. A trailer interchange agreement outlines the parties involved in the transfer of the trailer used to ship goods, the locations at which the trailer is to be exchanged, how the trailer is supposed to be transported, and the fee for transport. This sort of agreement is most common when semi-trailers are being used.

INVESTOPEDIA EXPLAINS 'Trailer Interchange Agreement'

In many cases, companies do not own all the equipment involved in shipping goods to their final destination. They will contract out to third parties that handle shipping, or will allow truckers to use their own equipment when making deliveries.

Companies that ship goods by semi-trailer are most likely to use a trailer interchange agreement, since truckers may switch trailers while traveling around the country in order to facilitate scheduling. For example, a trucker may drive the route from Los Angeles to Denver. The trucker will exchange the trailer in Denver so that the trailer reaches its final destination further away, while picking up a trailer for his return trip to Los Angeles. In this way, trailer interchange agreements make it simpler to move goods by not requiring a single trucker to drive the same distance.

A trailer interchange agreement makes the motor carrier – the trucker hauling the trailer – responsible for any physical damage caused to the trailer. Businesses involved in a trailer interchange agreement may require those hauling the trailer to have trailer interchange insurance. This type of insurance covers physical damage that may be caused to the trailer while it is being hauled by a party that does not own that trailer. The insurance coverage covers the trucker who is in possession of the trailer, and covers damage caused by fire, theft, vandalism, or collision. The policy has a deductible, and has limits to the amount of damage that will be covered. 

RELATED TERMS
  1. Private Carrier

    A company that owns the vehicles used to transport its own goods. ...
  2. New Alternative Transportation ...

    A bipartisan proposal introduced in April, 2011 that amends the ...
  3. Cass Freight Index

    A measurement of the monthly aggregate shipment of freight that ...
  4. Intermodal Freight

    Products and raw materials that are placed in a container that ...
  5. Business Automobile Policy - BAP

    An insurance policy that covers a company's use of cars, trucks, ...
  6. Cost and Freight - CFR

    A trade term requiring the seller to arrange for the carriage ...
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. The transportation industry as a percentage of U.S. GDP was 3% as of 2012.
    Fundamental Analysis

    How To Analyze The Transportation Industry

    By gaining an awareness of the transportation firms and trends that affect these players, investors can gain an edge by analyzing the sector and looking to profit from understanding it.
  3. Personal Finance

    Save On Planes, Trains And Automobiles

    Getting to, and around, your travel destination doesn't need to break the bank.
  4. Home & Auto

    How Inflation Has Affected Transportation Prices

    Getting around today is less expensive than it was 10 years ago, and this downtrend shows no signs of stopping.
  5. Home & Auto

    How The U.S. Automobile Industry Has Changed

    We give a brief history lesson on the rise and fall of the American auto industry.
  6. Trading Strategies

    Taking Another Look At Auto Stocks

    The automotive manufacturers in the U.S. may be on their way to recovery.
  7. Personal Finance

    A Primer On The Railroad Sector

    The railroad industry might seem antiquated, but it remains an important service that reaches all corners of the country.
  8. Forex Education

    Global Trade And The Currency Market

    Learn how the Bretton Woods system got the ball rolling for world trade.
  9. Active Trading

    Is That Airline Ready For Lift-Off?

    Break through the clouds to see if these stocks will rocket higher, or crash and burn.
  10. Options & Futures

    Analyzing Auto Stocks

    Find out what to consider before taking a ride with stocks from this industry.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center