Becoming a contract carrier for an established transportation company is a fantastic way for independent contractors and owner-operators to get steady work. Not every driver is eligible to become a contract carrier, though. While every company has a slightly different set of requirements, the general criteria are similar. Read on to find out what it takes to become a contract carrier.
Who Can Become a Contract Carrier?
Before heading to a company’s website for online carrier setup, drivers will have to determine whether they can become contract carriers. Most companies allow both independent contractors and owner/operators to sign on as long as they meet all of the other criteria.
Benefits to Independent Contractors
Independent contractors who sign on with carrier companies will be provided with both operating authority and guaranteed hauls. Most of the time, those who don’t own their own trucks can also lease a company vehicle, which is a more cost-effective option for most drivers than purchasing a truck.
Benefits to Owner/Operators
Owner/operators are also independent contractors, but they have businesses attached to their names and can legally operate under their own authority. Many owner/operators still choose to sign on as contract carriers, though. In this case, while the driver will still technically be classified as an owner/operator, they will usually need to sign a non-compete agreement that prevents hauling freight for competing companies. The trade-off is steady work for the duration of the contract.
Driving Record Requirements
Drivers will need to prove that they are eligible to work as contract carriers, which requires providing the hiring company with certain forms of documentation. They usually include:
Proof of one year of Active Authority
Satisfactory safety scores
A clean FreightGuard report regarding double-brokering, hostage loads, and unresolved claims issues
Proof of two or fewer service-related FreightGuard reports with documented responses
Drivers must also prove that they have no broker or freight-forwarding authority ties. In other words, they will need to be able to commit to working for the company exclusively for the duration of the contract.
Insurance Requirements
Whether drivers are technically classified as independent contractors or owner/operators, they will still need to provide proof of insurance. At a minimum, companies typically require active operating insurance that covers at least $1,000,000 in auto and $100,000 in cargo damage. There should also be a BIPD on file. Once they sign on, drivers will typically be required to provide a Certificate of Insurance (COI) citing the carrier company as a holder, as well.
What to Expect During the Onboarding Process
If drivers meet all of the criteria to become contract carriers, they’ll be onboarded using the carrier company’s unique process. In all cases, that requires completing training and providing a W-9 for tax purposes. Drivers will also need to agree to the carrier company’s terms and conditions and sign a detailed contract before they can begin taking work.
Get the Process Started
Thinking about becoming a contract carrier? The best place to start is by investigating different transportation companies to learn about their unique criteria, requirements, and onboarding processes. Some companies are more demanding than others when it comes to operating experience, insurance coverage, and driving records, but all of them will require drivers to provide basic documentation. When in doubt, check the company’s website or reach out to a representative for help with understanding the eligibility criteria.
