There are a few ways freight brokers can quote. The first way is to use a pricing system like Truckstop or Freightview. These systems allow for you to punch in the dimensions, weight, and commodity of your load, and then give you a price based on current market conditions.
The second way to get a quote is by using live rates. Live rates are when a broker has access to truckload rates as they happen in the moment. This can be done through a brokerage’s rate desk or through services like DAT Express Rates or TransCore Load Boards.
The third way freight brokers can quote is through negotiated rates. Negotiated rates happen when a carrier and broker come to an agreement on pricing.
How Does a Freight Broker Calculate Rates?
What Goes Into Calculating Rates?
As mentioned, several factors influence the freight rate. These will include the shipping distance, the overall size of the goods, the urgency of transportation, temperature requirements, or shipment classification. And given the average trucking company has around only one or two trucks available at any given time, there can be a huge price variance.
Travel Distance – Usually, the more distance the shipment has to cover during transportation, the higher the freight rate. The main reason for this price increase will be due to the overall fuel cost.
Shipment Weight – Another key component that will impact the freight cost is the overall weight. The heavier the shipment, the lower the charge per hundred dollars, but the higher the overall cost. As the shipment’s weight goes up and comes closer to the next weight category’s minimum load weight, the shipment will be rated in the next category for having a low weight for that category.
Shipment Density – When determining the trucking rate, the shipment density also plays an important role. The density is usually calculated accurately and will describe the goods being shipped in the Bill of Lading. The typical density for your average trucking shipment is calculated by dividing the weight by the volume. When it comes to palletized loads, the dimensions are also used in addition to the weight when calculating the density.
Freight Classification – It’s essential to keep in mind that every cargo has a specific classification that will impact the general trucking rate. In the United States, the National Motor Freight Traffic Association (NMFTA) classifies these as less-than-truckload (LTL) and full-truckload (FTL) in its National Motor Freight Classification book. There are, in total, 18 different classes, which extend from 50 to 500. Each freight class is determined based on the cargo’s value, handling, stowability, density, and liability.