How We Help Our Clients Reduce Spot Market Exposure by 50%

On May 15, 2018, we wrote about the first fully automated intelligent routing guide with dynamic rates in the US. That powerful tool enables shippers to automatically book a truck before the shipment turns into a spot load and has reduced spot volume for Fortune500 Shippers by as much as 50 percent. Loadsmart accepts 100 percent of tenders received from the dynamic routing guide, guaranteeing capacity. This feature helps shippers avoid the same-day/next-day markets, which are known for steep prices and service failures. Given the huge interest and questions we got from the logistics community, we decided to expand and explain the reasoning behind it and how it actually works in a granular way.

At Loadsmart, our mission is to do more with less. That’s why we innovated with a major customer to help them drive down their spot market exposure by 50 percent. We worked with our customer to help them do more with less by pushing market-based truckload rates into their TMS for every load that goes through their routing guide. Simply put, we do three things:

  • Provide real-time pricing on every load in the routing guide via API;
  • Auto-accept every tender we receive;
  • Guarantee capacity for all of those auto-accepted tenders.

This explains how we went from participating in a daily spot auction via email to a full-fledged integration with our customer to reduce spot volume.

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Shippers using the spot market poorly

Attention Shippers, the price of transportation is going up for multiple reasons but if you could do something to lower those prices wouldn’t you? Shippers are impairing themselves in the spot freight market. Most shippers release their list of loads to all of the brokers they know looking for the best options. What shippers are actually doing is creating more options for drivers that are not actually there.This creates a hyped up demand for trucks and drivers that are not actually there. (Now we all know there is a huge demand for drivers as a whole, I am addressing the spot market specifically). As this “demand” increases truckers expect higher prices. As the trucking industry evolves the hassle of trying to find trucks for your loads will become easier but for now trying to stop going to multiple brokers, know where the smartest and quickest way to gain access to truckers at low prices are and stop creating false demand that raise prices. Shippers and truckers for more info go to Inbound Logistics>>