How Do We Figure Truckload Freight Rates?
3PL, Customer Service, Shippers, Technology
How do you come up with truckload rates?
It’s the number one question we’re asked here at AM Transport Services. Here’s the funny thing–most folks who ask how we get our truckload rates don’t really expect an answer, thinking it might be a company secret. And who wants to give up company secrets?
Here at AM Transport, we don’t have secrets. In fact, we practice Open Book Management because we know trust is hard to come by in the logistics industry. Shippers and carriers are wary of freight brokers. We understand this, and that’s why transparency is so important to our team members. And that’s why we want to answer the question: How do you come up with rates?
Erik Jensen is one of our rate guys here at AM Transport. He’s an industry veteran with lots of experience crunching the numbers to create fast, accurate freight rates that benefit both our customers and carriers.
We asked Erik for the lowdown on how he comes up with freight rates.
“When someone asks for a truckload rate, the first thing I do is take a look at the lanes involved. I do this because I’m trying to find out if it makes sense for our operation to take this on according to volume, weight, and transit times. I don’t want to waste a customer’s time if it’s not a good fit for us.”
Erik’s response is exactly what we’re talking about when we say we’re transparent. Our success as a third party logistics provider depends upon our honesty. We work harder than any other broker we know, but we’re quick to admit when a load doesn’t make sense for our business.
“The next thing I do is analyze the lane. I reach out to carriers who have run similar lanes before to find out what they need to do it. We’ve been doing this a long time, so we have a large group of preferred carriers. I’ll talk to those carriers who like moving this particular freight and lane.”
We’re a small broker, and we work with a core group of small to midsize carriers. While lots of bigger carriers are constantly concerned about the driver shortage, these small to midsize carriers have long-term drivers with years of experience. When you ask them about the driver shortage, they don’t know what you’re talking about!
“Once I’ve figured out if the lanes and the freight are compatible with our business, and I’ve talked to some of our carrier friends, I’ll reference our always-evolving rating tool that utilizes internal and true market data to generate predictive rating. Carrier rates + Market data, Lane analysis, and Predictive rating equals a fair, fast, and accurate truckload freight rate.”
Here at AM Transport, we’re happy to talk to you about our rates. In an industry where trust is hard to come by, we pride ourselves on our transparency and dedication to cultivating fair and honest relationships with our customers and carriers. It’s the right way to be!