Why Do Cleveland Truckload Shipping Rates Change So Frequently?
Cleveland truckload shipping rates are constantly in flux, thanks to numerous cost variables such as distance, type of product and mode.
The ever-changing cost of truckload shipping can make determining an exact rate for a single freight somewhat challenging, especially if the plan is to use more than one carrier or mode.
To keep Cleveland truckload shipping rates as transparent, manageable and consistent as possible, work with a third-party logistics (3PL) firm. Establish open communication upfront. This will ensure your truck pricing quotes are more accurate and that you’re fully leveraging all the services and technology benefits your 3PL and carrier partners offer.
The Two Types of Truckload Shipping Rates
Understanding all that goes into truckload rate calculations is a useful tool in business strategy development and decision-making.
There are two basic types of Cleveland truckload shipping rates:
- Spot freight rate. This is the price that a freight service provider will offer to a shipper at any given point in time to move goods from Point A to Point B.
- Contract Rate. This is the rate that a freight broker, motor carrier or 3PL agrees to use to move goods via set modes and methods over an extended period of time. Most contract rates are set for a one-year term.
In general, if you have a standing relationship with a certain carrier to move goods on a regular basis, you may have some leverage to lower shipping costs. Spot freight rates tend to be higher because there is no consistency.
Truckload shipping rates also fluctuate depending on how far your goods need to travel, what special accommodations are needed, how much the carrier has to spend on fuel and whether you’re securing services for full truckload or less-than-truckload.
Full Truckload v. Less-Than-Truckload
Full truckload (FTL) is perhaps the simplest rate to calculate. FTL is when one shipper has enough cargo to fill a whole truck. Often, these rates are tallied with either a flat door-to-door rate or with a cost-per-mile calculation. With some exceptions, the amount and type of product shipped won’t impact the truckload rate so long as the weight is under 45,000 lbs and the freight carrier’s standard insurance coverage is adequate.
Spot or contract rates can vary for FTL, and there may be additional service charges for things like Hazmat certification, liftgate delivery, terminal handling, etc.
Less-than-truckload (LTL) rates are offered to numerous shippers whose products do not fill an entire truck. These rates may be lower than FTL rates, but they may be more prone to fluctuation.
Mileage Impacts Cost
The distance traveled obviously will be a factor in the total cost because longer distances require more fuel and time of the driver. However, there is some variation among truckload rates based on fuel costs and the trucking lane traveled.
A “lane,” as our trucking 3PL logistics experts can explain, is the route traveled between origin and destination. Freight volume costs can differ based on how much it costs to get goods out of one area and into another. If a city has a large number of trucks compared to freight volume, the Cleveland truckload shipping rates may be less expensive. Cities like Cleveland and Chicago, for example, tend to have lower truckload shipping rates compared to smaller, less traveled regions.
Along these same lines, some regions or even particular facilities may be considered “undesirable.” These would be areas notorious for backhauls, access issues and appointment scheduling headaches. If your origin or destination is one of these locations, your truckload shipping rates are likely to climb – but that’s not necessarily consistent for every 3PL or carrier.
Trucking Capacity, Local Markets, Seasons and Flexibility
As in all other areas of economics, supply affects demand. The availability of trucks relative to the demand for trucking services has a direct impact on Cleveland truckload shipping rates.
There is often an ebb-and-flow to trucking capacity, shifting not only depending on the local market – specifically the things like the cost of living, employment rates, equipment sales, season and natural disaster.
Seasons impact trucking rates for a number of reasons. For example, it might be more expensive to move goods in and out of Southern agricultural regions because trucking capacity has been influenced by the demand for trucks to move increased loads of produce. This is especially true if a shipper requires trucks with refrigeration capacity.
Holiday seasons, too, can impact trucking rates, as retailers know well. Most are ordering, importing and shipping higher volumes of goods in the third and fourth quarters. Carriers in turn respond to the decreased capacity with surcharges.
Generally, the more flexible you can be with your timing for pickups and deliveries, the less your rates will be.
Truckload pricing may rise even in slow-growth 2020, By William B. Cassidy, JOC.com
More Blog Entries:
Cutting Driver Detention Times a Top Priority for Cleveland Trucking Service, Sept. 29, 2019, Cleveland Trucking Services Blog