Question 1

What's the difference between common carriers and contract carriers, and does it matter for contract management?

Accepted Answer

Common carriers operate on published rates and serve all customers. Contract carriers (dedicated or specialized fleets) negotiate custom rates and service terms. Contract carriers require more structured agreements because terms vary by client; common carrier relationships still benefit from negotiated rate agreements and service commitments, even though the baseline terms are standardized.

Question 2

How often should we renegotiate carrier contracts?

Accepted Answer

Annual reviews are standard practice, typically 60-90 days before renewal. More frequent reviews (quarterly) are valuable for high-spend carriers or those with volatile fuel surcharges. Use performance data to drive renegotiations—poor performers warrant rate reductions or service improvements; strong performers might earn volume commitments in exchange for better pricing.

Question 3

How do we enforce SLA compliance when carriers miss commitments?

Accepted Answer

Documented SLA breaches—late pickups, damaged shipments, missed delivery windows—need clear escalation procedures. First breaches typically warrant formal notice. Repeated breaches trigger penalty clauses or contract termination discussions. The key: you must have real-time visibility into SLA metrics. If you're tracking SLA performance manually after the fact, enforcement becomes impossible because disputes over what actually happened muddy discussions.

Question 4

What metrics should we track to evaluate carrier performance effectively?

Accepted Answer

At minimum, organizations should monitor on-time delivery rates, damage ratios, dwell time, billing accuracy, and responsiveness to exceptions. Many shippers also track lane-level profitability, SLA breach frequency, and adherence to contracted rate structures. A CLM system simplifies this by centralizing performance data and aligning it with contractual obligations, ensuring every metric ties back to enforceable terms.

Question 5

How can CLM help reduce disputes with carriers over invoices and service failures?

Accepted Answer

Most disputes stem from mismatches between what was contracted and what was delivered. CLM reduces this friction by automating rate validation, logging every SLA deviation, and maintaining a defensible audit trail. When discrepancies arise, teams can reference AI-extracted terms, performance logs, and time-stamped evidence—leading to faster resolution, fewer escalations, and more transparent conversations with carriers.

topics

Resources

Your Ultimate Contract Management Resources

Carrier Contract Management: The Hidden Drain on Your Logistics Costs

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