Are shippers making a mistake with low contracted rates? – Freight Forecasting

Freight Forecasting with Michael Vincent

In this episode of FreightWavesTV’s Freight Forecasting, a key question is answered: Are shippers making a mistake with low contracted rates? Jason Miller, Associate Professor of Logistics at the Eli Broad School of Business at Michigan State University, discusses the current freight market and the pitfalls of pulling forward the contracted rate bid cycle with host Michael Vincent.

Watch the episode below:

Miller’s primary research stream examines firms’ logistics operations, with an emphasis on studying motor carrier safety, productivity, and pricing.

Michael and Jason also talk about using SONAR’s Outbound Tender Volume Index (OTVI), Outbound Tender Rejection Index (OTRI), spot rates and macroeconomic indices to prepare strategic plans during an economic recovery. 

OTVI is SONAR’s proprietary index of daily accepted full truckload tender volumes from across the nation and in 135 markets across the country. Increased volumes signify an increase in demand for capacity, while a decrease suggests the opposite.

OTRI measures the rate at which carriers reject customer requests to pick-up freight. The data is heavily skewed towards contracted business, meaning most of the requests are between a carrier and shipper that have an existing relationship and agreed upon rates.

They also explore whether low contracted rates negotiated during periods of crisis present future dangers.

Know more, faster – and find just what you need with SONAR!

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What's the SONAR ROI?

By increasing the number of loaded miles per day your drivers drive by 1% and your rate per mile by $0.03 you will make more per week #WithSONAR.

#WithSONAR you can save up to per week through better bid negotiations and more effective management of your routing guide.

#WithSonar you can add 1 more load per person each day and increase $5 margin per load, earning your company an extra per week.

Disclaimer: Every company’s circumstances are unique. Fixed and variable expenses, market conditions and operational factors vary. Unforeseen events may also affect results. Calculated potential results reflect the consensus expectation of FreightWaves’ experts. Actual results may vary.

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