Shipping plays a large part in any company’s bottom line. Finding ways to reduce the amount being spent in the supply chain is always a high priority. Luckily, there are many ways to drive down the costs. One way is by finding a balance between the right contract for your freight shipping and utilizing the spot market when it suits you best.
Advantages of Contract Shipping
When using contracted shipping, a transportation provider agrees to cover a particular lane for a negotiated rate. This method is typically viewed as the best approach and should result in savings in the long run. Additionally, it allows you to build a relationship with a company, which typically comes with many other benefits as well. By running the same lanes over and over again with the same company there are synergies that are allowed to form so that everyone can benefit. Also, once a contracted rate is negotiated it allows you, the shipper, to focus on improving your operations. This means finding other ways that drive down the costs in your supply chain even further. With a steady plan in place and a constant demand, contracted freight is the best option to go with.
Advantages of Spot Quote Shipping
In spot quote shipping, the shipper is getting a freight quote on a case by case process. This means that the price being offered is reflecting where the market is at when you are shipping at that time. Typically, spot quote shipping is not going to be as efficient, because you have to go out and do the work for each and every load. This is opposed to contract shipping where once you have the lane set up, you are good to go. So, why use spot shipping?
Spot quote shipping is often used when a contract shipment falls through or you need some sort of special shipment done rarely enough that it does not require a contracted lane. So even when you have all of your lanes contracted, it is important to keep your options open. In many cases, you can work with the transportation provider that you are contracted with on your spot quote. Spot quote shipping is also great for those smaller companies that don’t move enough freight to warrant using contracted shipping.
In Conclusion on Contracted and Spot Quote Shipping
Both methods offer their advantages, and for most companies, it is worth combining both of them to fit their needs when they are needed. Contracted freight shipping offers the security and routine while spot quote handles any surprises along the way. But, what’s the most important part? Shipping with the right transportation provider.
We would love to be a part of your supply chain and shipping process. With 23 years of experience, we have found out how to make shipping work for everyone involved. To find out more about our offerings, you can request a quote or contact us directly.