I want to talk a little bit about how freight broker’s rate their shipments because there seems to be a lot of confusion around this topic.
If you think about it, Freight Broker’s are in a unique position in a shipping transaction. We have to negotiate 2 times to get 1 job. We have to get a good shipping rate from a carrier and then use that to provide a competitive rate to our customer.
But, have you ever wondered where these rates come from?
In this video we are going to answer that question and I’m going to show you 3 ways smart broker’s rate all of their shipments in order to win load after load from their customers.
We all know that freight broker’s do not determine rates. Those come from the actual driver’s and a lot goes into determining a fair shipping rate.
There are factors like the market, seasonality, supply and demand of trucks, load to truck ratio in a given area.
Then there are other things to consider like is this a spot rate? or is this a contract rate?
Generally speaking, there are 3 ways Broker’s Can Determine fair freight rates to give their customers that will result in winning more jobs AND of course, making some profit.
- Shipping History
Long time brokers have the luxury of relying on internal data to determine freight rates. By using historical shipments and quotes, Broker’s who have this information available can use it to identify trends and accurately predict rates to give their customers.
Unfortunately, not all broker’s have moved enough loads to be able to do this accurately, but not to worry, there are 2 more ways to quote a shipment properly if you are just starting out.
- Speaking With Carriers.
There is no better way to get an accurate quote than by asking real trucking companies who run those lanes all of the time. In fact, we make it a habit in our brokerage to get at least 3 live rates from drivers before we provide a quote to a customer.
Is it time consuming? Yes, but you will never find us in a position where we underquoted our customer and now have to take a loss on a shipment to maintain the relationship.
The good thing is, any broker can do this by being proactive and making calls on their loads with basic access to any load board.
Pro tip: keep a log of every quote you receive and give to your customers. If you are not winning jobs, you need to have data to look at and see where you can improve. This will also help you build a database of carriers who may be able to help you move similar loads in the future.
- Use a rating tool
This is the ultimate cheat code to rating shipments and something we rely on daily. We use DAT Rateview which is a collection of real market rates, aggregated and averaged out to give brokers an accurate view of what is going on in the market today.
It is a crucial tool in our broker’s toolbag and I recommend everyone have one of these at their disposal.
You can sign up for a membership to DAT Power which will give you access to rate view through our partner link => right here and you’ll get one month free!
Hopefully this has been helpful and will get you moving in the right direction with quoting some truckloads this week. I want you to start to think about these rates analytically and understand that there are more factors in play than you can see on the surface.
If you want to know how to do this like a pro, the easiest thing to do is to sign up for my free web class where I break down different rate strategies, show how and where to find customers and how we target the most profitable freight.
