Shippers Sabotage Spot Market

Shippers Sabotage Themselves in Spot Market

Many shippers don’t realize that they sabotage themselves in the freight spot market. It is standard doctrine that competitive bidding achieves a lower price. However, our application of that principle disrupts Adam Smith’s “Wealth of Nations” by creating artificial demand that results in higher shipping prices and less profit for shippers.

Sometimes just asking for a bid

Broadcast [and sometimes just asking for a bid] available loads to multiple brokers looking for the lowest cost. But, what actually happens is that multiple postings of the same shipment go out to the spot market load boards, creating falsely inflated demand. Truckers are smart and naturally will hold out for the highest price.

A new price higher price point for a given shipping lane is being breached every day; in part due to capacity stripped from the market by new electronic logging device requirements. As those thresholds rise, higher rates become the new normal, and it will be hard to drive those rates back down. Let’s also not forget the once inexhaustible supply of new trucking company entrants into the market, which is exhausting itself due to increased regulation and low driver pay.

Frankly they’ll hide their capacity

Shippers naturally will retreat from the spot market, and try and lock in contract rates There is a problem in that thinking as well. The spot market, actually pays more per mile than most major carrier bid lanes. It won’t be long before these major carriers shift more capacity to the spot market, frankly they’ll hide their capacity from you, the shipper.

We must remember that economic principles, properly understood and applied, will always serve the public and the logistics industry better than what we think is “normal” maneuvering.

See also this link  https://www.shippersedgetms.com/blog/logistics-softwa…spot-market-bids ‎

For more information, contact Tim Taylor at 952-777-4421 or timothy.taylor@shippersedge.com

TMS Solutions

Create new capacity in a tight market

Capacity in a tight market

Down below I talk about how to create capacity in a tight market, but first a little backstory. For thirty years I was a freight broker. I also trained at least a hundred more. This trick is in every broker’s book and could raise your freight rates. Here is a link (below) to the full LinkedIn article on it.

Summary of how to not use the spot market

Here is a summary but by far not the complete story. Essentially when you go to get a quote from multiple brokers, they are immediately posting that load to the load boards causing near outrageous load to truck ratios. 10 to 1 or 20 to 1 load ratios are not realistic and in fact are not true except for posting. The truckers see this and jump from broker to broker to see who will pay them the most. The net effect is freight rates go up.

Your intentions are good but your tactics need brushing up

While your intentions, to get the best rate are good in normal circumstances they actually hurt you when taking your freight to the spot market. Doing all your business with contracted carriers is probably also not realistic as they too see these tall rates in the  spot market and dedicate ever growing capacity to the spot maret while telling you no trucks available. They are not dummies.

All carriers are short of drivers due to electronic logs and an economy on the upswing. We do have tactics deployed through software, that can help you manage through this capacity shortage but they’re proprietary and you have to talk to me to get them. Remember I was a broker for 30 years, I know all the tricks.

 A link to the whole story

Here is a link to Confessions of a (Freight) Broker https://www.linkedin.com/pulse/confessions-broker-tim-taylor/

To get my advice on how to create new capacity in a tight market, write me at timothy.taylor@shippersedge.com or call me at 952-777-4421 also visit us on the web at www.shippersedgetms.com