Definition of a Motor Carrier
A motor carrier is an asset-based trucking entity that transports property for compensation.
A motor carrier owns the assets and is primary on the insurance for the freight they move.
According to the US Department of Transportation the motor truckload market is a $700 billion dollar business with over 700,000 motor carrier companies, with 91.0% operating 6 or fewer trucks and 97.3% operating fewer than 20 trucks.
There are several differences between motor carriers and freight brokers.
To optimize either a freight broker or carrier, it is important to note the different key performance indicators both use.
The differences could ultimately determine where to source shipping:
Motor Carrier KPI’s
- Top Line Revenue
- Loaded Miles
- Empty Miles
- Cost-per-Mile
- Revenue-per-Truck
- Hours
- Tonnage
- Deliveries
- Fuel Economy per Vehicle, including Idle Time
- Safety
- Available Hours of Service (HOS)
- HOS Violations
- Unassigned Mileage by Vehicle
- Driver Turnover
- Freight Claims
Freight Broker KPI's
- On-Time Service
- Revenue per Load
- Margin per Load
Value Proposition of Motor Carriers and Freight Brokers:
Motor carriers move freight on the assets it owns and the freight carrier’s value-add is freight capacity at the best value for shippers.
Since freight brokers do not own assets, their value proposition to the freight buyers is service, technology and knowledge.
For more articles of interest:
- Differences Between LSPs and Motor Carriers
- Why Diversification of Truckload & Intermodal is Key to Logistics Success
- Best Truckload Companies (And How to Choose)
- Best LTL Companies (And How to Choose)
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