Manage Rates With On-Demand Quoting, Reverse Auction Tools
Q: Should shippers go to the spot market even when they have contracts?
A: Shippers that have contracts, regardless of the mode, are seeing rates continue to climb. General rate increases are continuing in LTL and TL trucking, for example. So it’s a good idea to take advantage of the spot market for one-off loads as well as shipments that are in static lanes that could otherwise move under contract.
Q: What’s the best tool to ensure you’re finding competitive rates?
A: We recommend using an on-demand shipment-quoting tool with reverse auction capability. With our tool, you can receive quotes within 30 minutes to 72 hours, depending on mode, from the transportation providers. Ocean freight typically has the longest response time. Or, you can assign the load to a reverse auction environment and provide rates for competitive backhaul type lanes.
Q: How does the reverse auction work?
A: In a traditional or blind auction, the highest bid wins. In a reverse auction, the lowest bid wins. The shipper submits a maximum rate and information such as shipment dimensions, equipment type, pickup, and delivery data they would like to see, and carriers bid lower to win the auction.
Users can view comparisons for equipment, transit days, and cost. In busy backhaul lanes, carriers bid aggressively to fit their network. Carriers can see the other bids and adjust accordingly, but they don’t know the other bidders’ identity. The reverse auction is set up for a limited time, usually 30 to 60 minutes.
Q: What’s the benefit for shippers?
A: In our experience, shippers realize savings of 12 to 25% compared to other selection processes. We have customers who use the tool for 50 to 80% of their shipments to ensure they get the best outcomes, even though they also have contract rates.
You can also tender the load directly in the tool or contact the carrier to finalize the arrangements. You receive the best price in the marketplace within a short period, compared to contacting carriers and brokers individually.
Q: What are other advantages to using online tools?
A: It automates manual processes, saving time for everyone involved. You can get the best rates to move your freight efficiently and more effectively use your staff’s time. You can eliminate phone calls and manual email reviews and evaluations.
Our tool integrates with a TMS, or you can use it as a standalone system. It’s cloud-based, so it’s available anywhere. Shippers can optimize their transportation spend with market-sensitive rates through on-demand pricing.