What Is a Trailer Interchange Agreement?
In the complex world of interstate shipping logistics, a trailer interchange agreement is a contract that covers the transfer of goods en route to their destination when they are being hauled by truck drivers working for different companies.
Most companies don't handle their own shipping and delivery; they contract it out to third-party companies which handle all the logistics.
This type of agreement is common when semi-trailers are used to transport goods across long distances.
Understanding the Trailer Interchange Agreement
Most large companies today do not own or handle their own shipping and delivery. They contract it out to third-party transport companies which handle all the logistics. These companies, in turn, have access to the fleets of trucks that get goods from their place of origin to the customer.
Each of those delivery fleets works within a set region or network. If a package is picked up in one logistical network but is headed to another network, the transport companies involved use a trailer interchange agreement to complete the delivery.
The trailer interchange agreement outlines the companies involved in the transfer, the location where the transfer is supposed to take place, and the fee for transport.
Truckers often have to switch trailers in order to meet the needs of scheduling across the transport network covered by the trucking company. For example, a trucker may regularly drive a route from Los Angeles to Denver. If a trailer full of goods that originated in Los Angeles is ultimately bound for Chicago, the company must arrange for the transfer of the trailer in Denver for the final leg of the trip.
The same trucker may be picking up another trailer before making the return trip to Los Angeles. A trailer may be switched between several companies and drivers on its way across the country. Trailer interchange agreements make the process simpler and more efficient by not requiring a single trucker to drive the entire distance.
Insuring a Trailer Interchange Agreement
A trailer interchange agreement makes the motor carrier—the trucker hauling the trailer—responsible for any physical damage to the trailer. Businesses involved in trailer interchange agreements may require those truckers to have trailer interchange insurance.
This type of insurance covers physical damage to the trailer while it is being hauled by a party other than the owner. The insurance coverage covers the trucker and damage to the truck caused by fire, theft, vandalism, or collision.
- Shipping logistics companies normally work with a number of trucking companies that deliver in specific regions of the U.S.
- A trailer interchange agreement details where and when a truck driver will transfer a trailer full of goods to another driver to be taken to the next destination.
- While en route to its final destination, a trailer may be transferred several times to several drivers.
Alternatively, a company can purchase non-owned trailer physical damage which applies even if there is no written trailer interchange agreement for the transport.