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Why Shopping Freight Quotes Is No Long-Term Strategy

January 10, 2024 Kevin Baxter

Frustrated Computer Woman

Scenario: You're a shipper who needs to move a load of product from point A to point B. What's your first step? For many it's hopping on the web and gathering freight quotes by searching the term and filling in the online forms from the top few results to convince yourself you've adequately comparison shopped.

Since the second half of 2022, that plan may have even worked out fairly well (provided you'd done adequate research into the companies behind those top results). But the freight market is cyclical, and as that cycle shifts away from a lengthy period of low spot freight rates, the best long-term strategy is a partnership with a reliable freight provider.

Why Not Stick With Freight Shipping Quote Shopping?

For one, that term is a mouthful. But there are real issues with playing the spot market and getting a freight shipping quote every time a load is ready for transport. The disadvantages of getting a quote for freight moves each time include:

  • It's a time sink - While the freight quote calculators found on many sites may be fun to fill out, if you have a lot of freight to move, doing so is a full-time job. As companies constantly evaluate their investments in staff, spending too much time on one task may take away from one's ability to handle other key responsibilities.
  • Quotes don't last - As spot rates depend on market conditions, they can change literally within hours. So if you don't pull the trigger right away, you may find things change for the worse by the time you're ready.
  • Prices are volatile - See the point above - prices change all the time, and while it's unlikely a change within a couple of hours would be enough to make you do a spit-take, the change within a couple of weeks within the spot market could do just that. That longer-term volatility also makes it extremely difficult to budget freight costs, as over time, one year of spot rates can be vastly different than the next.
  • No capacity guarantees - Pricing volatility aside, perhaps the greatest danger is an inability to move product when a shipper wants it moved, because there's no capacity available. Freight quotes are market driven, so it is possible for the supply of capacity on a specific lane to simply be maxed out due to high demand, and that leaves you, the shipper playing the shipping freight quote game, out of luck - or at best, paying astronomical rates to get it done. Plus, sometimes you'll get what appears to be a reasonable quote that's not tied to available capacity, only to be burned later.
  • Service is variable - Because there's no settled provider/carrier relationship, there is a lack of long-term accountability with potentially different carriers handling each shipment. Relatedly, it becomes difficult to manage requirements and measure performance against key performance indicators to make long-term improvements due to that fluid carrier-base.

All that being said, there are cases when going out for freight shipment quotes could make sense, say for a small LTL (less-than-truckload) load on a rarely used lane, or for shippers who simply don't move product that often (though for that second case particularly, if there's any certainty in the frequency, lanes and volume of shipments, the contract direction is still usually better). 

How to Find the Right Freight Provider Partner

The reasons to look long-term on a contract with a freight provider partner could just be the reverse of all the previous points, but rather than going that route, let's go over how to find the right long-term relationship. First off, a word about contracts in freight. A contract locks in price and brings expectations of capacity for a very high level of regular service volumes. While it's not a guarantee of capacity, for shippers that plan ahead, capacity is usually a fairly safe bet.

The contract also locks you in with a provider, allowing you to develop a relationship, track performance and make tweaks when needed to improve things. The ideal freight provider gives you an experienced contact who is the primary handler of your account, someone who knows your product and your unique needs. That contact should also be proactive with updates when needed and suggestions for improvement that they see. And that contact - or a designee well-briefed on your situation - should always be available to answer the phone or reply to a message.

This communication builds trust and allows for better accountability. On the topic of the freight quote, if ever you need something beyond what's in your contract, a freight provider can do the comparison shopping for you and present you with the best rate accounting for available capacity and high-level service for a given shipment. But the contract protects you from market fluctuations when spot rates inevitably rise, and allows your business to budget freight costs - usually a year at a time (and with minimal surprises).

The right freight provider partner should be able to leverage multiple modes when possible - truckload, intermodal, LTL or a combo - to get the job done in the most efficient manner. And it should incorporate the latest technology to plug in to market conditions, capacity availability, license and safety information, and shipment track and trace (shared with the shipper as well). 

All of these components may sound like a big ask, but at InTek, we fit the bill. Just reach out to us, and make our Request a Quote form the last one you'll need to fill out for a long time. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.

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