Logistics Blog

How does Spot Market Freight work?

By Millennium Logistics 17 May, 2017

 

Have you ever wondered about how the product you buy from a store ended up there? The complexities of a supply chain and the steps for moving freight to its end location are often overlooked. For manufacturers, suppliers, and retailers, logistics is a top priority to business operations. Accurately planning for efficient transportation routes and potential delays comes with many challenges, which is why many shippers turn to a freight broker to ship goods.

 

A freight broker is needed to move goods while the shipper focuses on their core competency. A freight broker matches shippers with transportation services in order to move freight from its origin to its destination. You can think of a freight broker as the middle man – connecting the shipper to a carrier and executing the freight move at the best rate. Freight brokers are well-versed in the latest trends and prices, plus have access to technology and a large network of carriers to make moving freight as efficient as possible.

 

Shippers will broadcast a load to a freight broker in order to find capacity at a low rate. Sourcing your loads to a single freight broker shows carriers your freight demand, enabling them to properly bid and commit to moving your freight. One advantage to using the spot market is to contain costs and reduce backlogs of shipping. Spot rates refer to the price quoted for immediate settlement on a commodity and is based on the value of the product. Spot rates change frequently, so shippers have little control of their budgeting process for transaction transportation movement.

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