How to Spot Good Loads in Bad Markets

You found a load on a load board that meets your business requirements. The next step is contacting the broker to negotiate the freight rate. Rates listed on load boards are rarely "all-in." All-in rates cover the hauling cost as well as accessorial fees and fuel surcharge. Brokers generally offer lower rates because that's how they make money. Don't be afraid to ask for a better rate, especially if it's good for your business - but don't just pull a number out of a hat either. Be smart about your negotiations by paying attention to market trends and broker information.

Know Your Operating Cost

Before doing anything, you need to know how much it costs to run your business. Keep this amount in mind when looking at freight rates. Generally, accepting rates below your operating cost can hurt your operation and may even put you out of business. Don't be afraid to turn down low-paying freight.

Pay Attention to the Drop-off Location

Some areas have reputations for low-paying freight. For example, getting good rates going into Florida is easy; getting those same rates coming out is a different story. If you know you probably won't get a great rate on your next load, you can prepare. Negotiate a higher rate going into the low-paying area to help cover the cost of getting out. Be careful about hauling into low-paying areas too often - low-paying freight is still risky.

Identify the Load-to-Truck Ratio

Pay attention to the number of posted trucks in your lane. Other carriers want the same loads you do, and they influence demand in your pick-up area. If there's a large number of loads and a small number of available trucks, you have room to negotiate a higher rate because your truck is in high demand. Low rates happen when there aren't enough loads to go around. You can check the number of posted trucks with a quick search on your load board.

Look Up the Average Spot Rate

Load boards generally post the average spot rate for a particular load. Does the listed rate fall within the average? Remember, don't be afraid to turn down low-paying freight. If the rate is low, see if the broker will come up in price.

Mark the Load's Times

Time has significant influence over freight rates. The longer a load remains on a load board, the more anxious a broker will be to find a truck - use that to your advantage. Also consider the pick-up time. If there's a small window between when you found the load and the pick-up time, the broker may be more willing to negotiate. The drop-off time matters too. Under the ELD mandate, drivers keep a closer watch on their Hours of Service (HOS). Does the drop-off time and location give you enough time to work safely within your HOS? All of these factor into the rate.

Ask About Fees

Some lanes are more expensive to run than others. Find out if there are tolls along your route. Do you need special permits to haul the load? Will you be required to pay dock or lumper fees? Is the shipper or receiver known for long detention times? Will the broker honor an accrued detention rate (usually this means the broker accepts, signs, and returns a revised rate confirmation)? Is the fuel surcharge covered in the rate? Ask about fees and make sure they're covered.

Get Everything in Writing

Before hauling any load, get the complete and signed broker and carrier agreements. You also need a signed rate confirmation. The broker is not obligated to pay you if there is no signed rate confirmation.

Verify the Broker and Shipper Information

Run a credit check on the broker's and shipper's information. Make sure you're hauling for an actual company and look out for scams. Hauling for a fraudulent company can put you out of business. You also want to know the broker's average days-to-pay. If you can't wait out their pay terms, you may want to look into quick pay or factoring.

When negotiating freight, ask questions. You're the only one looking out for your business, so make sure you're hauling loads that will make it successful. Don't be afraid to negotiate - the worst that can happen is the broker says "no" and you go back to the load board. That may be the smartest decision for your business.