Shippers have begun to embrace non-asset truckload providers that can deliver spot truckload rates via API rating. The leading truckload brokerage companies have solved the challenge associated with rating a load when the procurement process to identify a carrier has not yet been executed. In other words, identifying tomorrow’s or next week’s rate for a spot load in real-time.
Market indexes and historical data points are combined to identify a market truckload rate that enables the truckload broker to secure a carrier to haul the load while generating a margin on the load. The evolution of truckload brokers with the algorithm to produce a spot rate and deliver that rate via API is now becoming a mainstay within many of the shipper’s carrier solutions. As the leading truckload brokers continue to compete within a shipper’s spot market, the challenge for shippers becomes strategic in how they integrate API spot quotes, and capable brokers, into their carrier solution as a partner.
There are two critical initiatives for shippers as they integrate API spot rating capable truckload brokers. The first is the integrity of the shipment rating, tendering, and booking processes. The second, maintaining a competitive environment in which your spot rating process meets your cost objectives. In the first initiative, a procurement strategy is critical to achieving alignment of your business rules that lay out critical KPIs such as spot rating percentage, tender acceptance percentage, and service performance metrics. The second initiative requires a broader strategy with your incumbent providers that drives additional competition within your solution. Additional strategies may include adding more API spot-rating capable truckload brokers, and deeper utilization of your incumbent assets and truckload brokers within your spot load board. Lastly, the analytics gathered will provide visibility to greater initiatives that may include items such as an annual volume cut-off for contract vs spot; shortening the RFP length of time from one year to 6 months or 90 days.
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By Brad Stewart
Brad’s journey into logistics began as a Marine Officer and transitioned from the LTL docks to the non-asset side within the logistics service provider arena. As a co-founder of Rockfarm, Brad drives our business development efforts and delivery of our promise. An Arizona native, Brad enjoys spending time outdoors in his home state with his wife and family.
“Our approach to the market allowed us an opportunity to push forward in 2008 and enable our mission, “lower the cost to serve” to stand as a cornerstone to our company today.”
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