Using Data to Your Advantage in Negotiations
As a carrier or owner operator, it’s important that you use data to your advantage to capture as much revenue as possible on every single load that you haul. In this video, you’ll learn how to access market data from Truckstop.com that will make you more confident and more successful when negotiating with a broker or shipper.
When you create a new load search, results populate on the load search grid. To access the load details page, which provides more details on this load and the company that posted it, click on the posting.
On the load details page, you have quick and easy access to: Average market rates for this lane, and Decision Tools called Loads-to-trucks ratio and load densities for a load’s origin and destination.
It’s important to understand that spot market rates are largely determined by supply and demand forces. In trucking, supply means the number of trucks available to haul loads, and demand means the number of loads that need to be hauled. When the supply of trucks is low and demand for loads to be moved is high, then rates are high, meaning that you, the carrier, should feel more confident negotiating. On the other hand, when supply of trucks is high and demand for loads is low, then rates are generally lower, meaning that you, the carrier, should be more flexible when negotiating – otherwise, that broker or shipper might go elsewhere for their transportation needs.
Let’s take a closer look at the decision tools that will provide you with data on these supply and demand market forces.
Loads to Trucks Ratio shows the number of posted loads and posted trucks in the load’s origin and destination. The market outlook is simply a ratio that shows the number of loads picking up, to the number of trucks available.
- When there are significantly more loads than trucks, it should be easier for carriers to find loads, so you will likely have a better negotiating position.
- When there are a relatively even number of loads and trucks, the negotiation strength between carriers and brokers will be fairly balanced.
- When there are significantly more trucks than loads, it may be more difficult for carriers to find loads, so brokers will likely have a better negotiating position.
For example, for this load we see that there are 110 loads to every 1 truck at the origin and 21 loads to every 1 truck at the destination, so carriers have a favorable negotiation strength.
Loads to Trucks ratio tells you a lot of valuable information, but it’s not the whole story; you also need to consider Load Densities.
Load Densities tells you the number of loads picking up AND dropping off at this load’s origin and destination.
For the origin:
- When there are significantly more loads being picked up than there are being dropped off, it should be easier for carriers to find loads, so carriers will likely have a better negotiating position.
- When there are a relatively even number of loads being picked up and dropped off, the negotiation position between carriers and brokers should be fairly balanced.
- When there are significantly fewer loads being picked up than there are dropping off, it will likely be more difficult for carriers to find loads, so brokers will likely have a better negotiating position.
And for the destination, it’s the same concept: You want to see more loads picking up than dropping off, because you’ll have an easier time finding outbound loads.
In addition to these Decision tools, it’s important to know the average market rates for this lane.
Rate Mate is a rating engine that shows you the paid and posted market rate averages for this lane, with paid rates being transactional data, meaning rates that are being paid to carriers. Posted rates are the rates provided by the broker or shipper when they posted the load.
It’s important to note that average rates reflect the all-in rate, which includes fuel surcharges
Here you can see rate averages for the last 30, 15, and 7 days – it’s important to take note of this trend across time: Are rates going up? If so, you can feel confident asking for more than the average market rate. If rates are trending down, you may need to be more flexible with your prospective customer.
Additionally, take note of where this load’s posted rate falls on the trend graph: Is it below or above the market average? If it’s below the market average, don’t be afraid to mention that to your prospective customer when you’re negotiating.
If you’d like even more rate data on this lane, click on settings, and then select “Open Rate Mate.”
Please contact our awesome customer support team if you have any questions: email@example.com.