Nailing down the best freight rates is critical, yet challenging. The volatility of the freight market and the intricate negotiation processes between shippers, brokers, and carriers create a complex freight pricing environment for shippers. But finding the right freight rate is paramount to maintaining efficient operations and a healthy bottom line.
That’s why Farelanes has introduced a three-part guide to helping shippers find the best freight rates.
After laying out the challenges in part one, this second part of the guide looks at exactly how shippers can use analytics — specifically, three types of analytics and modeling tools — to optimize freight pricing. With analytics, shippers can find “the” right freight shipping rates, instead of simply settling on “a” freight rate.
Major Roadblocks Stand Between Shippers and the Best Freight Rate
Freight shipping rates are full of complexities, with myriad factors creating fluctuations in supply, demand, and pricing. Overall, three main roadblocks stand between shippers and their best freight rates.
The first is market volatility. Carrier capacity and shipper demand change frequently, sometimes suddenly and unexpectedly, if there’s a geopolitical conflict or a major disruption to supply chain networks.
Second, despite advances in technology and visibility tools to track the supply chain, there remains a lack of transparency in freight shipping rates. Fee structures can be opaque and plagued with hidden fees, hindering shippers’ ability to access transparent pricing.
Finally, negotiation processes involving shippers, carriers, and often brokers and 3PLs can be intricate and complex. All of the players in the supply chain have unique perspectives regarding freight volume, route complexity, and profitability.
In a Challenging Rate Environment, Smart Shippers Leverage Supply Chain Analytics
Data analytics are the key to overcoming obstacles such as market volatility, freight rate opacity, and complex negotiations. In the ever-changing world of logistics, shippers that aren’t using real-time data and supply chain analytics simply can’t compete.
Analytics offer insights into market trends, demand patterns, and pricing dynamics. As a hypothetical example, using analytics to assess last year’s truck freight rates and capacity could provide predictive modeling for this year. Analytics may reveal how trucking capacity changes once summer produce season begins, or when retailers start to ramp up orders for the peak holiday shopping season. Using that information can help shippers make data-driven decisions.
But patterns also change from year to year, even month to month, which is why modern and dynamic analytics that use market intelligence are critical to stay on top of the ever-changing market. These kinds of analytics tools can help shippers optimize pricing strategies and adapt to dynamic market conditions, enhancing competitiveness and profitability and ensuring they land the best freight shipping rates.
Three Ways Analytics Can Help Shippers Find the Best Freight Rate
How exactly can shippers use analytics to find the best freight rates? Let’s explore three key methods:
Predictive Freight Pricing Models
Shippers can use analytics in the form of predictive pricing models. As the name implies, the models allow shippers to predict freight rates based on data, analytics, modeling, and algorithms.
Predictive freight pricing models don’t rely solely on past information or crystal balls to try to predict how freight rates may change in the future. Rather, they use a combination of historical data and market indicators to forecast future pricing trends.
Accessible Freight Rate Intelligence
Shippers can also use analytics through accessible freight rate intelligence. With accessible rate intel, shippers aren’t playing a guessing game or trying to dig through old spreadsheets of information, but instead have data easy to find and access right in front of them.
Freight Demand Forecasting
Finally, shippers can utilize analytics in the form of freight demand forecasting. Similar to predictive freight pricing, freight demand forecasting projects how demand for trucking services — and, by extension, truck freight rates — could change in the future based on past data as well as current market intelligence.
Using demand forecasting, shippers can adjust their pricing strategies accordingly. For example, if forecasting models show freight demand on the rise, it might be smart to lock in a contract rate or bid for extra capacity before the surge comes.
Utilizing Data Analytics Tools for Freight Pricing Optimization
Like a three-legged stool, shippers’ freight rate strategies will be strongest and most stable if they use all three of these forms of analytics.
Predictive freight pricing and freight demand go hand in hand. Current freight rates per mile are often determined by the volume of shipper demand, alongside available trucking capacity. Likewise, freight rate intelligence and predictive freight pricing models join together to create the most accurate picture of future pricing in the logistics world.
The three analytics use cases can come together to create an effective, easy-to-use freight pricing optimization platform.
Farleanes’ Analytics Help Shippers Find the Right Freight Rate
Leveraging analytics helps shippers cut through the noise of market volatility, hidden fees, and complex shipper-broker-carrier negotiations to find the most accurate freight rates. Predictive pricing models, accessible freight rate intelligence, and freight demand forecasting must be used in tandem so that shippers get the best freight shipping rates and maintain their competitive advantage in the freight market.
Now that shippers are armed with information about the major hurdles in freight pricing and analytics as a solution, we’ll address how Farelanes can help you find the right freight rate in part three of our guide.
Farelanes offers a variety of lane pricing data to meet your specific needs:
- Silver: Unlimited line haul rates for city pairs, up to three favorite lanes, and up to 27 trailer types. Farelanes Silver gives you the information you need when you need it.
- Gold: When you need more, upgrade to Farelanes Gold…everything Silver offers, plus export Level II detail, lead times, fuel surcharges, and much more.
- Bulk Data Publishing: If you already run your own backend data system, our Bulk Data Publishing allows you to plug our feeds directly into your system, giving you unlimited favorite lanes, charts and graphs, miles, export data, and much more, via a flexible API that can adapt to whatever you’re running now.
So what’s next? Are you ready to use the power of Farelanes pricing to stay competitive? Get in touch today to discuss how by using the power of analytics, you can overcome the roadblocks standing between you and the right freight rate.
Leave a Reply