Dedicated Contract Carriage - Definition & Meaning
What is Dedicated Contract Carriage?
Dedicated Contract Carriage (DCC) is one of the new methods of distributing and trucking goods. This is typically an effective way to:
1. Reduce Costs
2. Increase trucking capacity
3. Transfer liability
To explain this concept in detail, we can cite an example. Suppose you need to move your goods to customer location. You generally have three options- one, have your own fleet of trucks or ships; two, contact a 3PL agency, broker or three, a combination of both. DCC is the ultimate way in which you can own and operate your own fleet of vehicles but a service provider carries out the operational headaches.
The only clause for a company to use DCC would be that it should be a regular distributor supplying goods for close to 75% of the time in a year so that the volume of goods trucked and shipped could justify the costs of hiring the service provider.
Who uses DCC
Many MSMEs across the globe have shifted to DCC. In additional to that giants like Walmart, Tesco etc. have also adopted it as their one stop solution for trucking and distribution.
Why to use DCC
In addition to the aforementioned advantages, DCC gives you the following :
1. The service provider deals with driver retention and hiring in addition to compliance of safety standards.
2. Capital investment and regulatory compliance is also under the contract that is mutually agreed upon
3. You have trucks running under your name but your headache is minimized
Hence, this concludes the definition of Dedicated Contract Carriage along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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