Define spot quote?

Define spot quote?
A spot quote is a group of rates for a month. It is calculated based on the current market and it is done without a contract. So the spot quote is a rate quote for an individual Line Haul. So you should start talking to carriers who run this line and before that, you shall gather all the information that they are going to ask you about. Information Needed For Quote You shall do the following:
  • Origin & Destination
  • Truckload / LTL
  • Dimensions
  • Commodity
  • Weight / Trapping Required?
  • Pallet Exchange Required?
  • Date of Pickup & Delivery
  • Contact (5) carriers to get their quote on the Line Haul.
  • Post the load and request rates from carriers that call you for the details
  • Get an average price for the load and then contact your shipper with the rate.
Dedicated Lanes When you quote dedicated lanes for shippers you will need to do some research. Dedicated means constant loads weekly from the same origin to destination and carriers usually love this type of freight, so they will give you a better rate than the normal spot quote line-haul rate. Because of the demand, this type of freight is very competitive and your quotes will be compared and considered against many others. It is essential to offer your shipper a quote that actually can transport the freight especially that you are non-asset based freight broker. Most brokers will provide low quotes to shippers so that they can get the freight in hopes of brokering it out to carriers. When this happens many of these freight brokers will not be able to move the freight since your quotes are not accurate. This is one of the main reasons shippers will not deal with many freight brokers. You must set yourself as apart from the rest and here are a few ways to do that. Rates of Market prices: Sometimes shippers will need carriers to move their freight due to a truck falling out or another vendor’s inability to provide the service. That will be when a shipper will have to pay the going rate for a truck to move the freight, so there will be a relationship with a lot of carriers that will be possible. You can make huge commissions on these loads, as the shipper will most generally pay whatever is necessary to transport the load. Do not gouge your shippers! Rates Calculation Freight charges vary according to a number of variables, but the two main factors are the weight of the load and the distance it must travel. Truck’s type affects the rates, regardless of the driver’s needs to make one or more stops to pick up the freight or to deliver it. However, rates for additional stops are usually negotiable. You’ll need to get an idea of the current “going rates” for the types of shipments that you can handle before you begin shopping for rates for specific shipments. This can be achieved by requesting copies of tariffs from several carriers and studying them. There are different methods to calculate these rates mentioned below. Load boards and calling for rates on posted loads is another way of getting information on current market rates. The National Motor Freight Traffic Association (NMFTA) classes products according to four characteristics Weight, Handling, Storability, and Liability. There are 18 freight classes that are beginning from class 50 (the least expensive) to class 500 (most expensive). For more information on NMFTA classes visit: http://www.nmfta.org/ Pages/welcome.aspx 1. Flat Rate: The broker can set up a flat rate for shipper’s load that might need to be hauled from one state to another. For e.g. the loads are to be shipped from Miami FL to Houston TX, then the broker can decide upon the flat rate to be $2200. 2. Rate per Mile: Rates can be determined based on the mile. For, e.g. the rate per mile is $1.5 and the carrier covers 2,500 miles then the total cost to cover the loads will be $3750. 3. Rate per Unit: The shipper may prefer to pay the broker per unit price like the payment for a carton of juice cans to be delivered is $1.75 4. Rate per Hundred Weights: The shipper can also choose the payment option of pay per hundred. weights. Say if $6.25 is the price per hundred weights and the total weight of the loads to be shipped is 32,000 lbs. Then the total amount the shipper will pay is $2000. The broker should find if there is any extra cost involved in the shipment such as extra picks, unloading fees etc. The broker should have good negotiation skills to ask the shipper for some add-ons like fuel surcharge etc. above the regular rate. With increasing fuel prices more and more truckers want the fuel surcharge payment to be added in the deal. The broker should have good knowledge about all loading techniques and regulations. He should be aware of the loading terminology like Full Truck Load (FTL) and Less than Truck Load (LTL). He should keep himself well informed to avoid any future problem related to loads transporting. Commissions that you earn on each load is your main source of income. There are two methods to receive your payment: You can bill the shipper the amount you’re going to pay the carrier plus the amount of your commission, or the carrier can bill the shipper directly and then pay you a commission from its revenue. The most common and efficient way to handle billing and commissions is to have the carrier bill you and then you bill your customers. Freight rates are based on many factors, including
  1. The distance that shipment will take.
  2. The shipment’s weight
  3. The density of the shipping goods.
  4. The commodity’s susceptibility to damage
  5. The value of the commodity.
  6. The commodity’s load ability and handling characteristics.
All of the above factors affect the classification of a commodity. The NMFC, or National Motor Freight Classification tariff, contains all product classifications. There are eighteen possible classes ranging from 50 to 500. The increasing of the class increases the rate for every hundred pounds you will ship. Most less-than-truck-load (LTL) rates are stated as a rate per hundred pounds, or per hundredweight. Rates of each hundred pounds are structured to decreases as the total shipment weight increase. For example, a shipment weighing 100 pounds may cost $41.00 per hundred-weight, while a heavier shipment–say, 500 pounds–of the same commodity (moving to the same destination) may only cost $35.00 per hundredweight. But doing the math, we see that the total charges for the 500-pound shipment are higher (5x$35 is greater than 1x$41). For very light shipments, most LTL carriers state a minimum charge. Carrier expenses such as fuel mileage, driver wages, IFTA (International Fuel Tax Agreement) fuel taxes as well as the toll roads play a critical role in the line-haul rates you submit to your customers, this is simply because carrier’s rates are based on mileage. Regardless of the line-haul rate, which is broken into mileage, there are additional costs that need to be calculated for example. If that very same $1,500 load had two extra stops, you should add another $50 to $100 per stop to the gross line-haul rate. Carriers tend to use two major formulas to determine shipping rates:
  1. the linear foot rule and 2. the cube rule.
The standard carrier linear foot rule states that shipments occupying 10 linear feet or more of trailer space are charged for 1,000lb per foot. Usually, this rule applies when there are at least five pallets single-stacked or 10 pallets double-stacked. For example, say a 10-pallet order of stackable freight occupies 10 linear feet. If those pallets were not stackable, they would occupy 20 linear feet. In the former scenario, a shipper would be charged for 10,000lb; in the latter, they would be charged for 20,000lb. Here’s a simple rule of thumb to remember: for stackable pallets, take the number of pallets on the floor of the trailer and multiply by two; that’s how many linear feet you should be charged for. For non-stackable pallets, multiply the total number of pallets by two to get the linear foot count. For more info you visit www.freightbrokerscourse.com 15% OFF  Packages above Basic.

 

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