Shippers turn to core carriers for high volumes and routine, heavily traveled lanes, while leaning on the spot market and load boards for smaller or more specialized moves.
the arrangement for the capacity, all accountability then falls on the shipper,” Price says. “Speci cally, the shipper is responsible to get the carrier to show up. If the carrier bounces (fails to show up to take the shipment), the shipper is out of luck and needs to start a new search while absorbing the delays and costing time and money. “Additionally, in this scenario the shipper is responsible for managing insurance and compliance, vetting the carrier, and scheduling the pickup and drop-off appointment,” he says. “Not only does this mean the shipper is responsible for doing the paperwork, it also means the shipper takes on all the risk. “For example, if the carrier loses the shipment, the shipper is on the hook for the value of the goods,” Price adds. “This is a compelling reason why a shipper contracts with one or more brokers to look for additional capacity. The broker then takes care of everything for the shipper and is accountable for any losses.” MANAGING COSTS When shippers are able to use the spot market strategically, and build relationships with brokers and carriers, they can better manage costs. When the spot market and load boards are a desperate move, shippers pay a lot for the volume on those seldom-used lanes.
“Shippers have a problem with the one of oad,” Croke says. “For instance, big carriers might have 300 loads on a dedicated lane between Phoenix and Los Angeles this week, so they have the capacity in place to support that lane. “If a shipper needs to move one load to Boise out of Chicago, they won’t nd a lot of contract carriers that will run that,” he adds. “But the carrier from Boise that is already in Chicago will, and a broker can nd that driver on the spot market.” SMALL SHIPPERS, ENGAGED USERS Small shippers without internal transportation departments are among the most engaged users of load boards, according to Brent Hutto, chief relationship of cer for Truckstop, an Idaho-based load board. Those shippers work with freight brokers to manage the spot market, often relying on small carriers on load boards to pick up their freight and get it where it needs to go. Keeping the spot market strategic. Freight brokers play an integral role in helping shippers use load boards effectively to nd carriers they need and ensure service is not overly compromised. “If a shipper uses a load board’s ‘book it now’ service and the shipper and carrier negotiate and con rm
“Even if it’s only 10% of your volume, the spot market can blow your procurement budget out of the water if you don’t get the right rates on the market for those loads,” Croke says. RISKY BUSINESS Using load boards comes with risks, particularly without support from a TMS. “With the right tools and historic data on the available carriers, these impromptu shipping arrangements can be made securely and ef ciently through a load board,” Price says. “Going without the right tools and data, however, comes with signi cant risk and potential cost. “Shippers have spent time building relationships and agreements with their core carriers, but typically have little to no insight around the performance of those on a load board,” he notes. “It’s hard to trust a random carrier, especially if and when the shipper is managing the logistics themselves and there is no prior history. “Posting on a load board is comparable to posting a personal ad in the classi eds,” Price adds. “Integrating freight data into your decision-making process can translate into a robust network for your company,” agrees Felton. “Make data-driven decisions whether you use core carriers or load boards.”
132 Inbound Logistics • January 2023
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