Arizona Adjuster Practice Exam

What term best describes Morgan Transportation, which transports cargo by truck for contracts with other businesses?

1. Private carrier

2. For-hire carrier

3. Common carrier

4. Freight forwarder

The correct answer is: For-hire carrier

The term that best describes Morgan Transportation, which transports cargo by truck for contracts with other businesses, is "for-hire carrier." A for-hire carrier is a transportation company that provides services to the public or other businesses for a fee. These carriers transport goods or passengers without the restrictions of a common carrier that must serve anyone who requests service. In this case, Morgan Transportation is engaged in contracted agreements to transport cargo, indicating that they charge for their services and operate as a business entity focused on fulfilling transportation needs for other companies. In contrast, a private carrier is one that transports its own goods rather than goods for other businesses, usually retaining exclusive use of its vehicles for its freight. A common carrier offers transportation services to the general public and must accept freight from any customer, operating under regulated rates and practices. A freight forwarder, on the other hand, is an intermediary who arranges for the transportation of cargo on behalf of shippers, but does not directly transport the goods themselves. Thus, Morgan Transportation, by providing contracted transportation services, clearly fits the definition of a for-hire carrier.