Are you a shipper looking to deliver a single shipment of goods on time and for the least amount of money? Luckily for you, it’s easier than ever to coordinate last-minute shipments with spot freight.
You can easily do so with the help of freight brokers and third-party logistics companies, which are also known as 3PLs. But how can you ensure you’re getting the best spot freight rates? Keep reading to learn all about how you can find the best spot freight rates for your shipments.
And when you’re finished, check out the other articles in our “Spot freight” series:
- What is spot freight?
- How to get the best spot freight rates
- Navigating the 2023-2024 freight spot market
What is a spot freight rate?
Traditionally, long-term shipping contracts determined freight rates. However, in today’s fast-moving freight industry, one-time shipments called spot freight have become more prevalent.
With spot freight, shippers can choose from multiple rates offered by various freight carriers, all for a single shipment. These rates are called spot freight rates, and these spot freight rates are dynamic. In other words, they change based on the carriers’ current supply and demand versus loads.
How does a spot rate work?
Spot rates are the best possible rate for a specific shipment at a given moment, though they fluctuate more than contract shipping rates. Several factors influence spot rates, including the following:
- Current market demand and pricing: When there’s plenty of space available on trucks, airplanes, ships or freight trains, spot rates are lower. Conversely, rates usually drop when carriers are looking to fill extra space.
- Speed: The speed at which you need your goods to arrive at their final destinations will impact the final rate. Typically, the sooner you need a shipment, the more expensive it will be. Also, spot rates are usually lower the more advanced notice that you provide.
- Supply chain expenses: Fuel prices, inflation and various other costs related to the shipping process can impact spot rates.
- Freight type and volume: There are many different spot freight options available, but the right one will depend on the size of your shipment. Each shipment size is associated with different spot rates, but spot freight rates are available for LTL, FTL, flatbed, dry, van, reefer and various other types of freight hauling.
8 steps for getting better spot rates
Looking for better spot rates for your on-demand shipping needs? If so, follow these eight steps to get cheap shipping rates.
Provide detailed shipping information
Spot rate quotes generated by 3PLs are based on each shipment’s specifications and requirements. By providing as much information as possible, you can get the most accurate spot quote, which will help you avoid unexpected costs down the road. For the most precise spot rate quote, be sure to provide the following information regarding your shipment:
- Product type
- Shipment weight
- Type of truck needed
- Origin city
- Destination city
- Pick-up date
- Any special requirements
Account for special requirements
If your shipment requires non-standard equipment or handling, make sure you inform your 3PL carrier. Special requirements may impact rates and capacity, but you can avoid expensive service disruptions or fees by communicating special requirements ahead of time.
Standard shipment requirements
- Maximum weight of 80,000 pounds for loaded trucks
- Approximately 45,000 pounds of freight
- Live loading and unloading
- No-touch standard so drivers are not expected to help
Non-standard shipment requirements
- Driver assistance or additional product handling
- More than two hours of loading or unloading time
- Equipment age restrictions
- Drop trailer
- Hazardous materials
- Multi-stop shipments
- Other specialty equipment
Get spot rates in advance
Most shippers will request spot rate quotes anywhere from one to two days prior to their shipping dates, but same-day spot freight requests are also common. Spot rates tend to increase the closer it gets to the shipping time. So, keep in mind that requesting your quotes as soon as you can confirm your shipping details and avoiding same-day quotes can help save you money.
Remember that spot rates constantly change
It’s the nature of spot rates to change constantly with supply and demand. Therefore, you cannot assume that your spot rate from last week is still accurate. Once you receive a spot rate that works for your shipment, confirm it as soon as possible. Doing so will lock in the price and the requested capacity.
Set pick-up and delivery times during business hours
You can get the best spot rates by shipping during regular business hours, which include Monday through Friday from 8 a.m. until 5 p.m. That said, there are instances where you cannot avoid shipping during holidays or weekends but be advised that you’ll pay more for spot freight during these times. If you need your shipment picked up or delivered at a specific time, include this in your request for the most accurate quote.
Get digital freight quotes
You can save time and energy by accessing digital freight platforms. With this freight technology, you can get spot rate quotes on demand and keep up with current pricing. While a good freight provider should have logistics professionals available in the event that you have questions, you can schedule spot freight when it works best in your day.
Cheaper isn’t always better
While cost is the primary concern for most shippers, it’s not the only factor you should consider when choosing from a list of spot rate quotes. By considering things like trust, efficiency, care of the load and the services, you can actively work to avoid mistakes that will end up costing your business more money in the long run.
Know exactly what you’re paying for
In most cases, spot rates are all-in rates, meaning they already include the cost of fuel. This is in contrast to contract rates, which are typically linehaul rates that don’t include the cost of fuel.
Make sure you verify if the spot rate is all-in before committing. Ask for the providers’ fuel surcharge matrix if the rate is not all-in. Also, inquire as to whether or not there are any other charges to be aware of from the provider’s accessorial schedule.
Save money with spot freight shipping
Whether you have unplanned shipments or you need a shipment delivered faster than your contract carrier can accommodate, spot freight can ensure that your company never mis
FAQ
Spot rates are rates given in real time for one-time shipments. On the other hand, contract rates are agreed upon for multiple shipments for a set amount of time under defined conditions.
A company needs to make a one-time shipment of auto parts from Chicago to Dallas next week. They request quotes from several carriers on a load board and ultimately book it with a small company offering to move the load for $1.25 per mile, paying a total of $850 upon delivery with no long term rate agreement in place. This ad-hoc $1.25 per mile rate is an example of a spot rate.
Shippers who have an irregular or unpredictable shipping schedule and need to book trucks on short notice would use a spot rate since they don’t ship enough consistent volume to leverage a annual contract. Companies launching a new product or entering a new market may also opt for spot pricing to avoid a locked-in long-term rate agreement while they evaluate demand and shipping lanes.
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