Like many industries, the freight industry is significantly affected by economics, climate and most importantly – technology.
Tech has allowed spot freight to expand and become more readily available.
Nowadays, it is simple and easy to set up a shipment at the very last minute, whether it be through a phone call or email. Understanding the way spot freight works is essential for shippers, freight brokers, and industry professionals.
Allow your McAllen logistics professionals at Lean Cargo Transportation to highlight all there is to know about spot freight.
What Is Spot Freight?
Spot-buy freight, also referred to as spot freight, is an exercise involving a company that has to ship goods and gather various quotes from logistic service providers (LSP) as a means for transporting goods from point A to B.
This shipping method is being utilized globally by shippers, big and small, through all industries and for each and every kind of transportation service. While it may be a simple concept to grasp, it’s important to understand the way rates vary, perks, obstacles, and usage.
What Are Spot Rates?
Spot rates are the prices quoted for instant settlement on a commodity and depend on the product’s value. Spot rates shift constantly, so shippers have hardly any control of their budgeting process for transactional transportation movement.
Spot Freight Loads – Trends and Stats
A 2018 report from the American Trucking Association assessed the trucking industry, which represents a percentage of all freight. Certain highlights include:
- Trucks moved 10.77 billion tons of freight, 70.2% of all domestic freight tonnage.
- The industry produced $700.1 billion in annual revenue in 2017.
- About 7.7 million people were hired in jobs associated with trucking activity, including at least 3.5 million drivers.
- Out of the 3.5 million drivers, 1.7 million happened to be heavy and tractor-trailer drivers. Minorities account for 40.6% of all drivers with 6.2% of truck drivers being women.
Since the beginning, data has been a key component of the freight industry. One of the industry leaders, Dial-A-Truck, took over handwritten processes when they developed the initial load board monitor in 1978. Dial-A-Truck is currently DAT services and provides several data points for both shippers and brokers.
Spot freight brokers are also an important part of spot freight. Think of them as middlemen as they connect shippers to carriers and execute the freight move at the greatest rate. They work with multiple outside variables in order to serve all types of customers, which can include:
- LTL shipment: A LTL that weighs less than the minimum weight a company has to use the cheaper truckload rate.
- Less-Than-Carload (LCL): Like LTL, LCL involves loads that don’t take up a whole train rail car.
- Less-Than-Container Load (LCL): Cargo ship containers are intended to ship freight over oceans. This term is utilized when goods don’t fill a full container.
- Refrigerated Carriers: These truckload carriers preserve perishable goods. The common industry terminology for these trucks is known as reefer.
- Straight Truck: There are many variations to the average semi-truck. Straight trucks don’t have a separate tractor and trailer. Flatbeds are another form.
About Managed Transportation
Managed transportation services include a larger scope of service offerings from a 3PL. Managed transportation involves integration and access to a transportation management system and the choice to have a logistics expert to help operate and track the data the technology gives. Thanks to managed transportation, shippers receive customized reports, effective operations, and save time.