Contract Rate
What is contract rate? A contract rate is a pre-negotiated freight rate locked in for a defined term, typically 6-12 months, between a shipper and a carrier or broker.
Full definition
Contract rates trade rate volatility for stability. The shipper guarantees volume, the carrier guarantees capacity, and the rate stays put through whatever the spot market does.
In loose freight markets, contract carriers often outearn spot carriers because their rate is anchored above spot. In tight markets, spot can run circles around contract — but service-level commitments still matter.
Most large fleets target 70-80% contract / 20-30% spot to balance stability and upside. Owner-operators rarely access true contracts and live primarily in the spot market.