Spot Market Freight Rate Bidding

Although benefits exist for contract pricing with freight carriers, many shippers, brokers and 3PL’s turn to load boards and the spot market for competitive rates. At the time of this writing, spot market pricing is beating contract pricing by an average of $.30/mile (source: DAT Trendlines™). Unfortunately, there is also inherent risk when using the spot market. Obvious pitfalls include exposure to fraud, unknown service quality and unpredictable capacity. Services like SaferWatch and TIA Watchdog can help with some of those risks, but nothing is 100%.

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 Current Rate Trends according to DAT Trendlines

Current Rate Trends according to DAT Trendlines

A safer alternative to load boards for spot market rates is freight rate bidding. It’s a simple concept that results in similar benefits without all the risk. The key is building a core set of trusted carriers and brokers that have proven themselves in the past or come by a credible referral. Bids are requested from this pool of verified carriers when the time comes to move some freight. This method offers a clear picture of the market at that moment and realistic counter offers can come from the bids.

Freight Rate Bidding the Hard Way

This practice may sound great, and it mostly is. With competitive freight rates from reliable carriers and brokers, what’s the catch? For this to work, coordinators must be highly organized, even when dealing with as few as 3 loads/day. The most common way of executing this strategy is via email. The best case scenario is 2 - 3 exchanges with each bidder, but add a few questions, counter offers and details and that number can grow quite a bit. Multiply that by the number of daily loads and it can become very difficult to maintain. Inbox folders and spreadsheets are the go-to solutions which might offer minor relief.

Freight Rate Bidding the Easy Way

Logistically TMS - shipping software for shippers, brokers and 3PL’s, takes the hassles out of freight rate bidding. After spending a couple minutes to create the load in Logistically TMS, it’s ready to send out for bids. Simply choose the carriers and brokers and click a button to request bids. Logistically TMS will handle all the emails and be the single source for bids and communication around the load. Because all messages, bids and counter offers stay in one place, there’s no overwhelming clutter. Upon selecting the winning bidder, they will confirm with a PRO/confirmation number and have instant access to the Bill of Lading and Rate Confirmation.

 Recorded interactins during bid process in Logitically TMS

Recorded interactins during bid process in Logitically TMS

To learn more about Logistically TMS and see a demo of how easy it can be start requesting bids for freight, please request a demo.