Contract rate
A contract rate is a price agreed in advance for a lane over a defined period, offering predictable revenue in exchange for committing capacity.
Last reviewed · by the Fleetchart team
Contract freight trades upside for stability. In a strong market the spot rate may exceed it; in a weak one the contract keeps trucks loaded while spot rates fall below cost.
Contracts usually carry service expectations — acceptance rates, on-time performance — that carry their own operational cost.
For example, say a shipper offers $2.50 a mile on a 500-mile lane, five loads a week across your trucks, for a year. That is 500 × $2.50 = $1,250 a load and 5 × $1,250 = $6,250 a week. In a hot month the spot rate might reach $3.00 a mile, or $1,500 a load, and you give up $250 on each load. In a slow month spot might fall to $2.00 a mile, or $1,000 a load, and the contract keeps you $250 a load ahead.
The value is in planning. If you know $6,250 a week is coming, you can plan for the truck payments and fuel with more confidence. Before you sign, check that the contract rate clears your cost per mile, because you agreed to run it in slow months as well as busy ones.