It’s been a tough few years for shippers. With little to no leverage, shippers were forced to pay the rates demanded of them by carriers. They had their hands tied, and they didn’t have much choice except to pay the piper if they wanted to get products to market.
But now things are changing. You’ve maybe noticed a market shift yourself or read our recent blog post, but shippers are gaining back the leverage they lost. For the first time in a good while, shippers have bargaining power. It’s time to use it.
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Market context
Alright, so what exactly is going on? Here’s how SupplyChainBrain puts it (emphasis ours):
“Indeed, shippers are now in a position to push for better rates. If shippers are still holding on to contracts six months or older, now is the time to capture lower prices. But shippers must be mindful that they’re working with a trusted partner. Because of continued fluctuations and uncertainty in supply chains, working with a trusted partner that offers end-to-end solutions, including truckload (TL) and less-than-truckload (LTL), drayage, and specialized transportation services such as vans and sprinters, will be the best solution for shippers. Managing such solutions via online platforms will benefit shippers and carriers by providing quicker rate quotes, faster deliveries, and timelier payments to carriers.”
Our own Signal Report encourages the same (emphasis added):
“We had been expecting dry van and temp control spot rates to continue dropping through most of H1 2023, with a reversion of the market probably by early Q3 2023. Considering the size of the gap between spot and contract rates, however, this might be pushed out further into late Q3 2023 or early Q4 when normal end-of-year seasonal volumes materialize – as opposed to 2022 where volumes declined in Q3 and Q4. Shippers should continue to take advantage of the inverted market to secure lower contract rates, but also to shift more loads away from the routing guide (after meeting carrier commitments) to leverage the spot market. We believe that the trend of using a mix of contract and strategic spot rates will continue beyond the current soft market.”
Analysts predict we’re beginning the journey back to expected cycles and seasonality. As that market turn takes hold and the expected supply and demand tug-of-war we’re familiar with returns, expect to see more routine RFP processes and rate evaluations.
Capitalizing on the market turn requires good data
But here’s the key question: What if you don’t have a rate and analytics provider on your side? If you’re only using your own historical data, what are you checking it against? How do you evaluate the veracity of your numbers? Without an outside point of comparison, you could be losing business, overpaying, or just leaving money on the table that belongs in your pocket.
Here’s your remedy: You can take your own internal data and supercharge it with DAT iQ data. Then you’ll have what the top shippers have – a robust bank of data and analytics that shows where there’s money to be earned and saved, and can optimize your future costs to be as efficient as possible. No more guessing, no more money on the table.
Where DAT iQ comes in
Adding verified data to your data and analytics stack puts a spotlight on inefficiencies and opportunities. When your data is backed by DAT iQ, you’ve got solid ground from which to negotiate lower rates. If you can see historic, current, and forecasted rates, you’re negotiating from a place of deep knowledge – lower rates will be easier to come by.
DAT iQ gives you:
- Rate benchmarking – Review past performance and drill down to see where your rates may be higher than market/peers. You’ll know if you’re underpaying, overpaying, or competitive at all.
- Current rate analysis – Time-specific spot or contract rates on a specific lane to gauge starting point
- Rate forecasting – Understand where rates are going to make sure you’re ready to make a strong case for the rates you’re aiming to set. If you can see where rates are headed, you can build sustainable budgets that are resilient to surprises and seasonality.
Ready to uncover inefficiencies and take advantage of the market? Visit https://www.dat.com/shippers to get started.
