Freight Rate Benchmarking now Available to Shippers, Carriers and 3PL’s on Subscription Basis
As a shipper, have you ever wondered if you are paying too much for freight? As a carrier, have you ever wondered how your rates on specific lanes compare to market rates? Effective, April 2, 2008, a web-based freight rate benchmarking service will now be available on a subscription basis.
Trans-Lucent Markets Inc. (http://www.trans-lucent.com), a Guelph, Ontario based provider of Transportation Expense Management (TEMS) systems is the first company in North America to offer this service on annual subscription basis. The new service will be marketed under the name of AccuFreight Index (AFI) and will allow users to access the Trans-Lucent rate data base in real time. The data base will contain freight rates by lane for domestic Canada and cross-border (Canada – U.S.) shipments.
Trans-Lucent currently provides a variety of transportation expense management tools. Their data base of carriers, rates and lanes will be augmented as new shippers, carriers and 3PL’s sign up for the service and enter their data in the data base. Initially the data base will have its greatest value to truckload shippers. Over time, as new subscribers come on board, the data base will contain a full spectrum of rail, intermodal, LTL, small parcel and expedited freight rates for many lanes throughout North America.
Freight Rate Benchmarking services have been available to shippers in the past for specific blocks of traffic. A shipper could pay a provider to perform a study to determine how their freight rates compare to market rates at a particular point in time. The shipper could then focus on those lanes where their rates are higher than market rates and either renegotiate with their current carriers and/or go to market to source other carriers. The value of AFI is that a shipper can now obtain this information on an ongoing basis in real time. Once you subscribe, the shipper or carrier receives a password that allows you to obtain this data on any lane at any time of the day or night.
Users of the system will be able to query specific lanes and look at mode options (e.g. truck versus intermodal). They will be able to look at the freight rate, fuel surcharge and other cost elements (e.g. accessorial charges) in the data base. This will allow all parties to be much better informed than they were in the past and allow for better transportation management decisions.
Carriers will also derive benefit from the system. As the name implies, it will allow carriers to benchmark their rates on specific lanes against their competitors. It will highlight areas where the quality of their head haul or backhaul freight may be suspect or where their costing model may be questionable. It may also help identify areas where certain carriers are targeting specific lanes or customers.
Of course, a shipper or carrier using the service must look at the freight rate data in the context of the other variables that effect the procurement of freight services. Not all carriers are created equal. Some carriers provide better service than others. Their service may be worth more for the added value and reliability. In fact, one of the features of AFI will allow shippers to rank carriers on service as well as price.
In addition, shippers with higher volumes will often, but not always, receive preferential rates as compared to shippers that move freight more sporadically on particular lanes. With those caveats, AFI should be a valuable service to shippers, carriers and 3PL’s.
“We feel that this type of system is something that the transportation industry in Canada has been demanding for some time,” says Shelina Lalani, President of Trans-Lucent Markets. “We plan to begin with truck-load rates, and have already made a massive amount of less-then-truckload data available for our next phase-in. We are especially proud of the ease and speed with which a member can, from their desktop, sign in, describe a type of shipment, and receive valuable data on current market freight rates for that shipment – it all happens intuitively and results are returned literally within seconds.”