Hello there. I’m Holly, Trinity’s friendly neighborhood freight Agent Recruiter. 

Every day I have the privilege of working with our Authorized Agents as well as finding new freight agent businesses to welcome into the Trinity family. This has given me a bird’s eye view of what it takes to run a successful freight agent business. And I can tell you, IT’S HARD!!! It’s a grind. It’s a hustle. It requires a BIG dose of grit and determination. But it’s in our blood! We thrive on the fast pace, the opportunity for unlimited income, and the flexibility of running our own show. 

With all that being said, I’m extremely proud of the tools, resources, and personalized support Trinity provides to our Authorized Agents daily. While I could go into all the things we can do to help support your freight agent business, today, I’ll settle for the opportunity to introduce you to four unique resources we provide our Authorized Agent network to make their days easier and their businesses more profitable. 

SAVE TIME WITH RFPs

Do you find Requests For Proposals (RFPs) an annoying time suck? Not anymore! At Trinity, we take care of the heavy lifting for you. 

Trinity’s Authorized Agents have full access to our in-house Pricing Team for RFPs both large and small. Our Team works hard to combine data from many market sources plus our extensive internal lane history to compare a total of nine data points. That’s some impressive wizardry, I tell you! This will not only save you time from figuring out the right pricing but also give you confidence that the pricing details you share with your customer are spot on. 

And that’s not all! We also provide you with real-time market-specific rates focused on your customer’s needs. This way, you can be as hands-on or hands-off in the process as you choose. 

AND DON’T WORRY ABOUT CAPACITY

You’ve just saved time on the pricing aspect of your RFP. It’s complete, and you’ve won your lanes, but what happens next? 

You get on the phone with your relationship carriers for their rates and volume commitments. In an ideal world, the rates are great and there’s plenty of capacity. Awesome! Time to get back to helping your customers and growing your freight agent business. 

But how often does that really happen? Often, your relationship carriers don’t run those new lanes, don’t have the capacity to commit, or ask for rates above the market. So, what do you do then? Most likely, head on to those dreaded load boards. 

Here comes Trinity to save the day. Our Authorized Agents have full access to our Carrier Procurement and Development Team. This Team of Trinity experts will take the data from your RFP, find you capacity using our proprietary lane matching technology and then get rate agreements in place for COMMITTED capacity to service your customer’s needs. 

So, if you often work with RFPs for your customers, go ahead and press the easy button with Trinity!

WORK SMARTER, NOT HARDER

Are you looking for a deeper dive to uncover your most profitable freight?  We’re here to help you with that! By using your load history, our Pricing Team will provide you with a Network Analysis to give valuable insight into your most profitable lanes. With this data in mind, you’ll be able to focus your sales efforts on the markets that produce the highest margin to help you reach your freight agent business goals. We’ll help you work smarter, not harder! 

EASILY DIVERSIFY YOUR FREIGHT AGENT BUSINESS

One more thought for the day; let’s say you specialize in full truckload freight. In fact, you’re such an expert that you can almost move it with your eyes closed.

But in this constantly evolving freight market, your customers ask you for help with all kinds of other weird stuff like less-than-truckload (LTL), intermodal, drayage, ocean or air, expedited freight, technology solutions, warehousing, e-commerce…maybe even a total outsource!

With you being a full truckload shipping expert, this may sound intimidating! And the last thing you want to do is send them somewhere else and risk that “other guy” poaching your freight.

There’s no longer a need to worry! Trinity Logistics has you covered. We offer full operations teams for our Authorized Agents to handle ALL other modes besides full truckload. Pair that with our parent company, Burris Logistics, and their opportunities, and it’s simple. You bring the opportunity, and we do the rest. All you need to do is sit back and collect the extra margin for your growing freight agent business.

Additionally, we provide you with monthly mode training classes so you can learn and be confident in what you are selling. There’s no need to be the subject matter expert on all modes when you have Trinity Team Members to support you and your freight agent business. 

JOIN THE TRINITY FAMILY AND BEGIN GROWING YOUR FREIGHT AGENT BUSINESS

Trinity Logistics has over 30 years of experience aiding in the success of our freight agent businesses, with many of our newer businesses seeing a 50 percent increase over a two-year period from joining. Consider joining our Authorized Agent Network today so you can gain more time to focus on your customers, generate more revenue, and we’ll focus on everything else. 

To learn more about our Authorized Agent program and all the ways we can save you time and help you build a successful freight agent business, feel free to contact our Agent Team phone at 800-846-3400 x 1908 or click the button below! 

Managing transportation costs is a top challenge for shippers, while another challenge that goes in hand is sourcing consistent and reliable capacity. Here enters the contract and spot markets. Which one is best? Which has better shipping freight rates?

Some believe the spot market is the way for shippers to save money and stay on top of capacity, while others think it’s contract. Choosing to use spot rates versus contract rates can be one of the biggest decisions for a logistics manager. Understanding their differences and when is best to use them will help give your business success. So, let’s dive into each of these markets so you can better determine your business’s strategy.

WHAT ARE SPOT RATES? WHAT IS THE SPOT MARKET?

Spot freight rates are short-term transactional quotes for moving freight. These shipping freight rates are the price a transportation provider offers a shipper for a one-time quote to move their product from origin to destination. They reflect the real-time balance of supply and demand in logistics and the truckload market.

The quote is based on the value of the equipment needed at the moment of settlement. What determines the value of that equipment? Well, whether there is an excess or shortage of that exact equipment in the market and the lane at that time. Because market conditions directly affect spot rates, they are dynamic and can change day to day, even hour to hour. This is because the freight market can be more complex than simple supply and demand.

Thus, an increase in supply will lower spot rate prices if not accompanied by increased demand. And an increase in demand will raise spot rate prices unless accompanied by increased supply.

How to Track Rates in the Spot Market

You can keep track of the spot market through several industry websites and freight load boards to give you an inclination of what’s happening in the spot market. Some resources we like to follow are DAT and FREIGHTWAVES. 

We even push out a monthly update to keep you in the loop of rates and other happenings in logistics. You can find our latest Freight Market Update on our YouTube channel.

It’s crucial to stay on top of the spot market should you find the need to use it. Even if you decide to use contract freight, it’s good to keep a pulse on it as contract rates are affected by the spot market. The higher spot rates are, the higher contract rates are too.

Who is the Spot Market Best for?

Many carriers, shippers, and third-party logistics (3PL) companies turn to the spot market for competitive rates. No matter how big or small, every shipper will move some of their freight on the spot market at some point. The spot market is great for when you might have a one-off shipment outside your usual shipping lanes. It’s good for shippers who don’t have enough regular volume for contracts or those who need more capacity than they contracted out. Or even those specialty shipments or non-standard load requirements.

Spot Market Pros/Cons

HOW TO GET YOUR BEST SHIPPING FREIGHT RATE ON THE SPOT MARKET

Provide Accurate, Detailed Shipment Information

Though you can get a spot quote with as little as the origin and destination zip codes, pick-up date, and equipment type, it’s best to have ALL shipment information ready. Excluding any critical information may have you unexpectedly paying for it later. The more precise information you have, the more accurate your spot rate quote will be, so you won’t have any surprise added charges.

Information you should have for your best quote:

• Origin city or zip code

• Destination city or zip code

• If your shipment requires EXACT pick-up and delivery appointments, make sure to communicate your appointments times

• Pickup date

• Equipment type (i.e., dry van, refrigerated, flatbed, RGN, etc.)

• Commodity type

• Product weight

• Any special requirements or non-standard requirements

• Examples of special/non-standard requirements are live load or unload, “no-touch” by the driver, drop trailer, hazardous materials, multi-stop, driver assist, floor-loaded, more than two hours of loading/unloading, and equipment age restrictions.

Provide Ample Lead Time

Shippers will request spot quotes anywhere from a week in advance to the day of. Most will request them one to two business days before their shipping date. The more time you can give before your shipping date, the better, as spot rates tend to increase as the pickup date approaches.

Giving yourself a few extra days to secure pricing and capacity will usually work in your favor and lead to less expensive freight rates. This is because there will be more carriers available versus trying to find one on your shipment day.

Don’t Wait Too Long to Confirm a Good Spot Rate Quote

Spot market rates are volatile and quickly change over short periods of time. Therefore, the quote you received yesterday may be different today. So, when you find a rate that works for your shipment, don’t wait to confirm it. Instead, lock it in ASAP for confirmed pricing and capacity. Once agreed on a rate, a reliable provider will rarely change it UNLESS an important piece of information about your shipment changes.

Set Appointments During Regular Business Hours

There is usually more capacity available during regular business hours. As incredibly hard-working as they are, drivers still like to be home on holidays, weekends, or nights when possible.

If your appointments need to be precise, make sure to include that information in your quote request so your quote can be accurate. But, if you can be flexible with your times, setting appointment windows instead of strict appointment times can open you up to more capacity. For example, drivers have to manage their strict Hours of Service so a flexible appointment window can help them better plan their day.

Spot Market Technology

Many providers offer digital freight platforms and give you access to free instant freight quotes. This can be a great way to stay on top of current pricing without sending a lot of emails to different providers. Good freight providers will have logistics experts on call should you have questions or need more help. But having the ability to get quotes on demand can add time back into your day.

Be Mindful of Carrier Selection

While cost is important when choosing your transportation provider, make sure you consider several other factors into consideration. You should consider their experience, efficiency, and service. While a cheap quote is great, it can sometimes result in a missed pick-up, hidden accessorial, or even a damaged product. All this could end up costing your business more.

When shopping the spot market, shop around and get quotes from a few different providers. Once you have a few quotes, evaluate the rates while considering your shipment requirements and ask yourself a few questions about your potential provider:

• Will this provider meet my service requirements?
• Are they easy to do business with?
• Can I use their tech tools to operate more efficiently?
• If something goes wrong, can I trust them to fix it?

WHAT ARE CONTRACT RATES? WHAT IS THE CONTRACT MARKET?

A contract rate is a rate quoted by a transportation provider to a shipper for a set lane and its freight characteristics over a set period of time. Contract rates can also be known as primary rates, bid rates, committed or dedicated rates. In short, they are a long-term, stable pricing agreement between shippers and transportation providers.

The contract market is highly dependent on the spot market. Typically, the three to six months of spot market activity leading up to an RFP will influence contract rates.

Contract agreements are great for both shippers and transportation providers as the shipper gains committed capacity while the transportation provider gains fixed rates and dedicated freight volume. Everybody wins.

How Contract Agreements are Set

Contracted agreements or Requests For Proposals (RFP) can be set as mini bids (monthly), quarterly, bi-annually, or annually. However, since the contract market and its rates are based on the fluctuating spot market, it’s rare to see a contracted agreement set for more than a year to stay in tune with the market.

Contract agreements are set during the bidding process, aka the RFP. The shipper will take the RFP and send it to a network of transportation providers and those providers will reply with their quotes. At the end of the bid process, the shipper will award lanes to specific providers based on their rate, service, capacity, and any other considerations.

CONTRACT RATE PROS/cons

HOW TO GET YOUR BEST SHIPPING FREIGHT RATE ON THE CONTRACT MARKET

Any shipper has the opportunity to host a bid. There’s no set minimum shipment requirement. So, no matter how large or small you are, you can take advantage of an RFP.

Just like getting quotes for the spot market, the contract market requires detailed information to get your best rates. The more information you can tell your potential providers, the more reliable rates and capacity you’ll be able to get offered. Information that should be included in your bid:

• Commodity type(s)

• Weight per load

• Cargo value

• Estimated shipping volume for each lane

• Time frame of RFP contract

• Origin and destination zip for each lane

• Shipment frequency for each lane

• Any performance requirements

• Any special load requirements/accessorials

• Fuel surcharges

• Keep in mind that fuel surcharges account for around 30 percent of a carrier’s operating expenses, and as we all know, fuel costs can fluctuate dramatically.

• It’s important to establish your own fuel surcharge matrix for each potential diesel price and communicate that with your providers before conducting a bid. This will help you get consistent and accurate rates.

What Happens When a Contract is Broken?

Sometimes, contracts will get broken. For both shippers and carriers, breaking a contract may result in fines. Most likely when a carrier breaks a contract, they will end up with a dissatisfied customer and disqualification from future bid opportunities. While shippers will face a damaged carrier relationship, less reliable capacity, and most likely, higher rates on the next bid.

Technology Needed for RFPs

While the practice of RFPs sounds great, what’s the catch? For an RFP to work effectively, shippers need to be organized in their execution and collection of information. No matter your size, every shipper needs a way to track and store their supply chain data and procurement information. It helps to have one central location to keep all your freight volumes, provider names, and awarded lanes.

Some smaller shippers will use tools like Microsoft Excel, Google Docs, or even their providers’ technology platforms to manage their RFP data.

But if you’re a larger shipper, those tools can be overkill. Instead, 90 percent of shippers use digital platforms, often transportation management systems (TMS) to manage their procurement information. A TMS can help take the complexity out of RFPs and take your process from a few hours to a few minutes. It allows you to enter your contract information quickly, select the transportation providers you want quotes from, and click send. It will also help you have one location to easily view bids and communication around your loads, keeping you from overwhelming clutter.

Regardless of which workflow you decide for your business, it’s crucial to have a well-documented record on hand to easily reference.

WHAT’S BEST FOR ME?

Usually, no shipper runs all their freight through the contract market alone. As there are positives to each market and it can be hard to predict all volume, most shippers work to have a strategic blend of both spot and contract rates. What works best for your business will depend on the current state of the freight market, your freight, and your provider relationships.

Some questions to ask yourself when determining what market will work best for you are:

• Are my freight lanes affected by peak capacity demands during the year?
  • If you answered yes, the contract market, especially during those times of tight capacity, may be best for you.

• Am I willing to take on the risk of price fluctuations?
  • If you answered yes, you might want to look at the spot market first.

• Does the contract price include a capacity guarantee throughout the year, without a general rate increase (GRI)?
  • If you answered yes, the contract market may be best for you.

If you have determined that your volume is sporadic and not consistent, the spot market may be best for you, but it doesn’t mean that you can’t work with a carrier contractually. You can still build an approved carrier list with strong relationships even if you have to use the spot market on every shipment.

If you decide contracted freight is best for your company, keep an eye on spot market indexes and position your RFP bidding based on the freight cycle when possible. By moving your RFPs to when the market is at its lowest levels, you’ll gain your best rates.

Some shippers budget for 70 percent contracted and 30 percent spot or 50-50. No matter your balance, the freight market is always changing and so should your strategy. Keep a pulse on the market and your business needs so you can always find what’s best for your company.

NEED HELP WITH YOUR STRATEGY FOR COMPETITIVE SHIPPING FREIGHT RATES?

A shipper’s decision in balancing the use of contract versus spot rates can be difficult. Finding a good strategy for competitive shipping freight rates can be a lot of trial and error.

If you’re having challenges deciding when to use each market, Trinity Logistics can help. We have the technology and expertise you need to simplify your logistics management and offer support. Our Team Member experts are here to help you with your logistics strategy, including offering Quarterly Business Reviews and Freight Market Updates, so you can keep a pulse on industry trends and your company’s growth.