For much of the shipping and transportation industry, the name of the game is adaptability. Market volatility and customer inconsistencies can make it challenging to predict and plan for freight load and transportation needs. Conditions such as this make spot freight loads more appealing at times for shippers, carriers, and freight brokerage providers. While many outside the supply chain network remain unaware of what spot loads are and what impact the spot market has on local and national economies, the growth seen in this niche service area cannot be denied. According to the Journal of Commerce, "Spot market dry van volumes from Los Angeles to Chicago jumped 13 percent last week, pushing seven-day average rates in that lane up almost 16 percent year over year." With similar trends seen across the country, it is little wonder the interest in spot freight load boards and innovative tools geared toward the spot market have stayed in focus for shippers and carriers throughout the supply chain network. Let’s take a closer look at what a spot freight load board is and how each supply chain party can use it to manage their needs and costs.
Few people would be surprised to learn that the shipping and transportation industry makes up the foundation of our country. Nearly every segment of local and national economies depend on goods movement from point A to B. The trucking industry created almost $800 billion in revenue in 2018 alone. With this much activity and this high level of impact, shippers and carriers alike must stay up to date with the latest innovations and technologies. It is this modernization that can keep them competitive and on top of their games. And a freight spot load board does just this and a lot more. A modern load board is an online platform and a digital marketplace where carriers, shippers, and freight brokers can post and search for loads to keep freight moving faster and with fewer hiccups. The load board facilitates communication between various parties to improve procurement while also maximizing profits.
Freight management parties use freight load boards to find, post or work with transportation capacity or freight in the mid-market and beyond. According to the experts at Convoy, "Shippers often build a transportation management strategy that includes a primary contract carrier and an extensive routing guide of backup carriers to reduce their exposure to spot market volatility." Even with contracts in place, they still rely on spot freight capacity when demands surge. They, therefore, need to utilize load boards to maintain maximum capacity levels and ensure customer needs are met. A good way to think of load boards would be as a data-informed matchmaker for the broker, shipper, and carrier.
This triad has a natural implication for improving access to real-time capacity across all freight management parties. According to Gartner, "digital freight networks can help companies that are looking for real-time available capacity or looking to reduce transportation costs during the current crisis, as well as during future challenging times." While the current market is beginning to return to some semblance of normalcy, the future is still uncertain, making sport freight load boards vital to the modern supply chain network.
Sometimes market conditions remain calm and predictable based on historical data and predicted trends. Shippers and carriers can expect with some confidence that rates will rise and fall depending on market trends, consumer demands, and known peak season and slow time market processs. However, the spot market is prone to volatility, which was demonstrated fully at the start of the global pandemic when certain products and services spiked in appeal and demand. In contrast, other formerly in-demand products sat unused and unwanted. Other issues such as driver and capacity shortages, inventory limits, slower delivery times, and economic instability all sent spot freight rates in a strong incline due to the high demand. They affected capacity availability and pricing on spot load boards. While global pandemics cannot be predicted or efficiently planned, standard peaks and valleys and minor disruptions can. Shippers and carriers alike must prepare by keeping spot freight capacity opportunities in their sights and by finding the best load board for truckers that can help improve access to capacity regardless of how market dynamics affect rates day-to-day.
When consumer habits and needs shifted dramatically in response to the global pandemic crisis, shippers posted loads to the spot market in levels never seen before. This was simply to increase the volume of loads tendered in the market beyond contracted capabilities. Many shippers found themselves starring at empty shelves while waiting for coverage. However, those who partnered with digital freight marketplaces did not experience as severe a drop in productivity and capacity because they had the means to source capacity more efficiently and reliably than much of the competition early on during the crisis. In fact, some of the best uses of spot freight load boards for shippers include:
Just as shippers must adapt to changes within market volatility and consumer needs, carriers too must pay attention to freight loads and shipping trends. Capacity levels change, market trends shift, and load boards remain a vital tool for the entire supply chain network. At the start of the pandemic and even now and a new sense of normalcy descends on the global supply chain, spot freight and load board integration remain vital for carriers everywhere that need to:
The final player to utilize freight load boards is a group of the various third-party intermediaries involved with shipping and transportation. Forwarders, 3PLs, and specialty brokers all play different shipper and carrier-like roles, continuously looking to get the best deals and arrangements at any given moment. They rely on the load boards to find the right load for their shipper clients while at the same time working to save money and locate the best loads for their carrier clients. Brokers work to match available loads with available drivers to keep the supply chain moving and to ensure goods reach their destination, carriers get a fair rate, and shippers remain productive. Meanwhile, others might be more involved in the global ocean freight and drayage market, such as the case with global freight forwarders. Regardless, load boards are still a resource for bringing the resources of different companies and transportation services together.
Investing in supply chain technology allows any company to quickly and easily simplify its supply chain. By doing so, management can eliminate unnecessary steps, improve efficiency, and lower expenses. The importance of technology in regard to spot load management is exemplified in the following ways:
In its most simplistic form, supply chain technology can encompass any digital equipment used to simplify the daily processes for shippers and carriers within the supply chain network. This naturally includes systems that can connect to the dozens, if not hundreds, of TMS platforms in a supply chain, systems that work across other legacy platforms, and those that make it easier for carriers and transportation service providers to access them and provide capacity to those that need it. Ultimately, technology and optimizing the trucking network allow shippers, carriers, and brokers to work seamlessly to improve freight transportation and services throughout the supply chain.
To survive volatile markets and economic spirals within the shipping and transportation industry, scalability, flexibility, adaptability, and durability can make or break transportation service providers today. Market volatility and customer inconsistencies today put unprecedented levels of pressure on shippers and carriers alike. It is conditions such as this that make spot freight loads not simply an appealing option but a necessary one as well.
While those not intimately familiar with the supply chain network and digital tools of the transportation industry may not fully understand the spot market's impact on the supply chain network as a whole, the growth seen in this niche service area cannot be denied or discounted. Digital freight networks and spot load boards can help companies improve productivity while also reducing costs across the board. Despite the slow return to normal, the shipping and transportation market still faces an uncertain future in many ways, which makes sport freight load boards as vital as ever to the modern supply chain network. Contact newtrul today for a demo to learn more about harnessing the power of spot freight loads and a world-class, capacity-focused spot freight load board.