How to price freight loads: carriers that use data price more accurately

Adam RobinsonFreight Market Blog

freight loads

Today, freight load management is a major trouble area for carriers and logistics managers within the shipping industry. And the overall industry trucking trends imply an absolute need to grow more strategically. The key to success in the sector remains staying focused on the path that leads to increased profits. This must always remain the focus of the entire supply chain. It is a challenge for many shippers and carriers to know where they should put their focus and where the data directs them to go. According to FleetOwner, trucking companies must go where the data leads them, not where they think it is going to lead them. Your goal is to generate actions and make choices based on correct facts.” For managers in the transportation industry, freight load pricing accuracy remains a source of confusion and disruption.

Why outdated data hurts carriers in the short- and long-term

Problems developing from marketplace interruption often share similar features and root causes. Freight management companies and partners can remain unsure of how to attain or utilize meaningful, actionable freight data

Within the freight load management area of the network, data is essential. Unfortunately, outdated and limited data can cause more disruptions and problems than doing nothing. Even when processed with advanced business intelligence tools, inaccurate data will do more harm than not having access to any data at all. 

To further complicate things, freight load data can look vastly different depending on where it is pulled from and what system is processing it. 

When managers have inaccurate or outdated data, it is like trying to plan for the weather using a week-old forecast. The chances are high for major errors and issues with the data. Most importantly, basing any decisions on old data can pose a risk as bad as blindly making choices with no data at all.

Looking to the future with e-commerce and automation

E-commerce has long been a vital component of the shipping and logistics industry. But without a doubt 2020 was a significant game-changer for the freight load industry. Lockdowns and work-from-home regimens accelerated the need for and the utilization of e-commerce in a way that has never been seen. Unfortunately, the rising demand for e-commerce services leads to the standard expectation for fast, free shipping, regardless of whether a carrier applies spot or contract rates.

Customers wanted and soon demanded reliable, fast and free or very affordable shipping. According to Shopify, “free shipping is just the tip of the iceberg: 39% of U.S. shoppers expect two-day shipping to be free, while the same-day shipping market in the U.S. is forecast to top $9.6 billion in 2022.” The problem with the growing demand for free shipping is that these services still cost money. The fees and expenses incurred still must be paid for somewhere along the chain. And the only way to see these costs is to get real-time freight data across the full carrier transportation network. Carriers need that data to ensure their drivers are appropriately compensated and kept interested in working for that company.

Overcoming obstacles with smart data and freight load management

The best and only successful way to overcome flawed data analysis is to use effective technology. Tech-driven processes make it easier to get work done throughout the supply chain.  Accurate freight load management relies on access to real-time data and the shipping team’s ability to utilize the data efficiently. Some key concepts can help ensure obstacles and disruptions are overcome. Remember that carrier pricing is subject to the following:

  • Market conditions can change quickly and shift hour by hour at times. 
  • Freight Market volatility will often vary significantly from one market to another simultaneously.
  • Lead time requirements, load availability and customer demands can change quickly.
  • Continuous encroaching of competitors.
  • Automatic processes or the lack thereof, which could help free up human brainpower for more complicated tasks.
  • Adaptability and communication throughout the chain, which are critical to collaboration and for future growth.

Considering that, it’s easy to see how increased transportation data use can translate into more meaningful pricing strategies. As volatile as the last few years have been within the industry, 2021 and beyond could remain the most impactful years yet. Embracing data and automation and taking advantage of tech tools and the process is the best way to see success in the years ahead.

It all boils down to one step: getting the data and making sense of both granular and national freight markets to price loads the most accurately.

Tap into freight load management services with the right partnership

The key to success for freight logistics managers is staying focused on the path that leads to increased profits. Access to accurate and reliable data is essential to stay ahead of the competition. Automation, big data and precise communications can help improve performance throughout the shipping supply chain. Making the most of freight management and data analysis services will represent a key focus in the years ahead. Take advantage of the services available today. Click the button below to request a FreightWaves SONAR demo.