New digital tool shows how freight companies can save money on spot market
You can read this article in 2 minutes
A new tool launched by C.H. Robinson shows companies how their spot rates compare to a trusted third-party benchmark and breaks down where they could save money.
The Market Rate IQ, created by C.H. Robinson, shows shippers which factors in their U.S. spot pricing are market-driven and which they can control. It also incorporates DAT’s RateView, a database of U.S. spot freight rates.
Companies have had to turn to the spot market more as global disruptions affect their supply chains, explains the company. Since January 2020, load postings are up 176% while postings from lorries looking for loads are down 5%.
That imbalance drives rates up and companies often cope with that by spreading their spot freight among many transportation providers – even though that added effort doesn’t always result in better rates.
According to the company, Market Rate IQ provided $75 million in potential customer savings across $1.2 billion in spot freight spend during its incubation phase.
These were the top five reasons customers paid more than they might have needed to, even when their rates were below market average:
- Lead time – Carriers charge a premium when given little lead time for pick up.
- Uneven freight – Because any given shipping lane has a finite number of lorries, putting too much freight in the same lane on the same day instead of spreading it out means you might be paying extra for carriers elsewhere to drive out of their way.
- Weekend pickup – To avoid the higher cost of Saturday and Sunday pickups, some companies might find it beneficial to run freight out of their warehouses only five days a week.
- Multiple stops – Adding too many stops to fill a lorry has diminishing returns. Other optimization strategies could be more cost-effective.
- Delivery geography – Carriers charge more if they have to drive empty to get their next load. When shippers have spot loads going to a remote destination, they could save money by working with a logistics partner who can pair up loads originating nearby.
Market Rate IQ is offered within C.H. Robinson’s Navisphere™ platform and powered by C.H. Robinson’s freight dataset.