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How To Find Truckload Freight Capacity in The Contract Market

This article will detail how shippers can effectively find truckload freight capacity in the contract market. Why Shippers Prefer The Contract Market Over The Spot Market The contract and spot markets hold different interests and values for shippers. Preference usually depends on the shipper’s operations, the nature of the shipment, shipping consistency, and the shipment ... Read more

This article will detail how shippers can effectively find truckload freight capacity in the contract market.

Why Shippers Prefer The Contract Market Over The Spot Market

The contract and spot markets hold different interests and values for shippers. Preference usually depends on the shipper’s operations, the nature of the shipment, shipping consistency, and the shipment volume. For those that will choose to leverage the contract markets and their truckload rates, it will be for the following reasons:

1. Cost Savings and Stability

The contract market offers shippers the advantage of locking in a price for the duration of the contract. The longer the contract and the more volume the shipper expects to ship, the better rate that the shipper will get, and it is for the duration of the contract. This stability starkly contrasts the spot market, which can be very volatile and heavily depends on the demand and supply dynamic, making it challenging to predict and navigate.

2. Guaranteed Capacity

By leveraging the contract market, shippers know there will always be a space or capacity for them because of the contract terms. The shippers with contracts also enjoy priority treatment when carriers are allocating spaces or capacity for each truckload. This way the shippers always have reliable transportation for their freight or shipments.

3. Improved Service Levels

The contracts between the shippers and the carriers in the contract market come with some expectations and demands on the side of the shipper. The shippers have the luxury of demanding on-time deliveries, enhanced visibility and transparency, and a certain level of service from the carriers, which helps them optimize the entire truckload shipping process for their supply chains. This level of service is not always guaranteed in the spot market, especially when the demand is high.

4. Stronger Relationships

Longer contracts with carriers help shippers build rapport and strategic relationships with these carriers. These relationships guarantee that future negotiations go smoothly, and where there are crises like the COVID-19 experience from a few years ago, these shippers and their cargo will be made a priority. Stronger relationships usually help with eliminating anxiety from the logistics operation.

How To Find Truckload Freight Capacity in The Contract Market

The contract market holds a lot of appeal to shippers, moving large volumes of goods over long periods of time, but it can be challenging to find a carrier that guarantees truckload freight capacity these shippers can rely on for optimal shipping operation and experience. Nonetheless, there are strategies they can leverage when searching for truckload freight capacity:

1. Leverage Carrier Network

If a potential business or shipper has a prior history of shipping(could be FTL or LTL shipping), the shipper can find reliable carriers from those shipping experiences that offer an optimal service for their shipping operation. It is better to leverage a truckload carrier that has been tried because there is already a relationship. The carrier, in a bid to keep the shipper’s business for longer, may likely offer concessions that will be interesting for all parties.

However, the strategy will not work if the shipper has not been shipping in the past. That shipper will be better off with recommendations from other shippers that have been and are currently shipping and have carriers they can vouch for or recommend. An alternative is to join industry associations and participate in trade shows to find and connect with potential carriers easily. 

Remember that it is important to conduct due diligence when partnering with any carrier.

2. Utilize Online Technology Solutions

There are freight matching platforms that help shippers find available carriers. Some of these platforms include 123cargo and WTransnet. While they are by no means comprehensive, such platforms help shippers find listed carriers who could have with the requisite truckload equipment and freight capacity for their shipping needs. Such platforms have dedicated sections for contract rates and freight.

The transport management system is a technology solution that also helps shippers streamline the process of finding reliable carriers and truckload capacity. It can also be integrated with the carrier’s application to optimize route and transparency. And some TMS platforms cater specifically to contract freight.

3. Request for Bids and Proposals

When shippers are not exactly sure what to do, they can call for proposals and bids from various carriers. This puts the shippers in a position where they have to sort out the best proposals and find the goldmine they are looking for. However, beyond cost in the proposals, shippers should consider the truckload capacity available or being offered, the delivery timelines, sustainability and transparency policies of the carriers, and then the market reputation of the carrier.

When the request for proposal (RFP) is made, immediately start negotiating shipping rates directly with the carriers who fit the bill. Direct negotiations with these carriers allow for more solid terms and trucking solutions. It also enables both parties to clarify their demands and expectations and find common ground. Ensure the contract rates, service levels, and length are properly discussed and negotiated.

Knowing the capacity of the truckload carrier also ensures that shippers are not getting into a partnership with carriers that have regional capacity when they need a national capacity.

Tips For Getting The Best Truckload Freight Capacity

How To Find Truckload Freight Capacity in The Contract Market

There are tips and strategies that shippers searching for truckload freight capacity in the contract market can leverage to find the best possible deals and favorable contracts that will positively impact the shipping experience.

1. Define The Needs of The Business

Before searching for truckload carriers with capacity, the shippers must know what they want, what they want to achieve, and how to go about it. All of this streamlines the search process and helps avoid negotiations that will not yield fruits.

2. Focus on Strategic Relationships

When searching for truckload capacity in the contract and spot market, it is important to do so while focusing on building strategic relationships. Strategic relationships typically mean the supply chain and shipping operations are prioritized by carriers, enhancing seamless negotiations and better concessions. All of which can significantly impact the shipping process.

3. Explore Data and Market Trends

Truckload shippers can leverage freight rate procurement tools to find the current rates and market trends for full truckload (FTL) and LTL shipments. They can also explore industrial publications to learn the latest trends in the industry. Both provide information that can come in handy during negotiations with carriers.

Exploring Truckload Freight Capacity With Baton

Baton is a recognized leader in linehaul solutions and a progressive force in the European market. We provide effective and reliable linehaul services to our customers, making us an attractive partner for their business and brand. With Baton, exceptional service is a given — it’s embedded in our DNA. Our robust truckload freight capacity ensures we can transport any cargo over any distance within our market, offering peace of mind and efficiency every step of the way. Contact us today

Frequently Asked Questions

Q1: Why is securing truckload freight capacity important for shippers?

By securing a truckload freight capacity, shippers are able to ensure reliable transportation for shipments. This helps them manage costs, mitigate risks of capacity shortages, and stabilize supply chain operations.

Q2: What role do freight brokers play in finding truckload capacity?

Freight brokers are intermediaries between the carrier and the shippers. That means they help shippers find available truckload capacity, negotiate rates, and manage international logistics operations. They do all of these while providing access to a broader network of carriers.

Q3: What factors should shippers consider when selecting a carrier for a contract?

Working with great carriers means having a seamless transportation process. To select one, the shippers must consider carrier reliability, service quality, geographic coverage, equipment availability, safety records, and pricing. Evaluating their carrier’s financial stability.