Among enterprise companies, one critical aspect of successful negotiation and capacity procurement is a better predictive outlook of both spot and contract truckload rates. The ability to accurately predict the volatility of specific lanes and load types can help shippers keep truckload rates under control. Tracking market trends within truckload rates relies heavily on data and analysis.
Why the spot truckload rates track higher than contract even during times of disruption
Managers don’t want to learn that they are essentially paying a higher transportation rate with one carrier when another freight carrier offers a much more competitive truckload rate. The key to avoiding this kind of situation is predictive planning and analysis. Knowing what the current contract and spot truckload rates are today are critical. Increasingly, however, it is also critical for shippers, brokers, and carriers to know when rates ebb and flow allowing freight market participants to adjust budget forecasts, know how a carrier prices freight rates, and understand the services offered to justify the rates carriers are offering. This concept explains why a growing number of shippers today shift to smaller and more frequent mini-bids. As stated by FreightWaves, the benefit of mini-bids is to avoid becoming trapped by locked-in rates that suddenly shift out of their favor. Smaller bids give shippers and carriers more opportunities to renegotiate and reword rates, proposals and service plans. This kind of real-time data analysis and application is essential for shippers to stay strategic and tactical as they forecast out contract and spot truckload rates.
Data-driven insights provide a rubric for guiding RFP processes
Enterprise shippers naturally want to secure the most cost-effective capacity for their freight loads. Often this means contracted volume is the way to go. However, the spot market often is just as beneficial and dynamic for helping shippers find a way to rapidly source capacity; although it can be harder to discern at times without accurate data-driven insights.
When enterprise shippers know how to prepare for and predict contract truckload rates accurately, they are more likely to find success with their RFP bids. But even the best data-driven and predictive bids can take time to review, consider and initiate, so every moment does count, and the slightest delay or hiccup can result in missed capacity and less than desirable rates. Knowing how to predict truckload rates at scale, using technology like SONAR SCI’s Lane Acuity, and how to adapt to market trends quickly will help improve RFP processes and boost bid acceptance and capacity procurement.
How to use data to absorb market volatility and manage freight proactively
Real-time freight data and proactive planning calculations help shippers identify and prepare for their most at-risk truckload moves. Risks come in many forms and shapes within freight transportation and management. Some stakes are bad and should be avoided because they never pay off in the end. Others get seen as calculated risks that can pay off if the end rewards are worth taking on that added risk. This is where the ability to manage and gain deeper lane-by-lane analysis into contract truckload rates can change the outcome significantly.
Embracing and utilizing freight analytics makes it easier for shippers to calculate risks, avoid problems securing capacity, and maintain up-to-date communications. Data helps highlight key problem areas that need to be addressed and offer insight into what trends need to be taken advantage of within the market. Analytics can help companies predict truckload rates more efficiently and accurately in both the short-term and the long-term.
Expand bidding strategies based on data-driven market insights
The key to staying competitive in today’s ever-changing market is maintaining sound freight bidding strategies backed up by data-driven insights and analysis. This data-centric approach is what has helped big-name companies remain competitive and successful. Small companies trying to stay competitive against giants like Walmart, Amazon and Costco can struggle at times with this. The added pressure means that enterprise shippers need to know how to account for changes in truckload rates to stay strategic and manage freight spend. They need to pre-empt issues that might arise, maintain a unified preemptive view, and utilize lane-by-lane analytics as much as possible. Request a FreightWaves SONAR demo to learn more about how to improve day-to-day activities, and also consider requesting a SONAR SCI Lane Acuity demo to find out how your team can better manage RFP processes too.