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Transport Topics: “TL Contract Rates Flat in 1Q, Bid Process Irks Some Execs”

May 22, 2017

TL Contract Rates Flat in 1Q, Bid Process Irks Some Execs

Transplace managed more than 200 bids in truckload, less-than-truckload and intermodal this year, the company told TT.

“Shippers had a pretty good shopping list of high-quality carriers in the bid to choose from this year,” said Ben Cubitt, Transplace senior vice president of engineering and strategic carrier management.

However, some trucking companies privately expressed frustration at the impression that more shippers prioritized saving money — using phrases such as “price aggressive” — over strong relationships. Cubitt disagreed.

“In no case are shippers going at the lowest price possible, or even at 90% of the lowest cost available. Shippers typically keep north of 60% of the possible savings,” he said. “We see shippers that exclude lanes from bids because they do value incumbency. If another carrier is 2% or 4% lower, most shippers won’t change just to save every dollar. We run a lot of scenarios where we favor incumbents by 5% or 10%.” If the market indicates that there are a lot of great carriers that can do it for 10% or 15% less, Cubitt added, then shippers will react and make the switch.

Read more here.