4 tips for surviving the trucking spot market
Running a trucking business
Being your own boss gives you freedom and can be lucrative. However, to be successful in the trucking industry, you need to plan carefully. This includes understanding the trucking spot market and how to find the most efficient routes to maximize your profits. Keep reading to learn more about the spot market, including what it is and our top tips for booking loads that will earn you more.
What is the trucking spot market?
Typically, large carriers work off of long-term contractual agreements to move freight on a regular basis. However, when operating under your own authority, you are responsible for finding your own loads on the spot market. This is a marketplace of goods that need to move “on the spot” as a one-time shipment.
Navigating the spot market can be tricky for a few reasons. Firstly, spot market rates fluctuate so you’ll need to understand seasonal trends to prepare accordingly. In addition, some brokers prefer to work with more established carriers, which leads to fewer options for new authorities. And, while being independent has a lot of great perks, it also means that you’ll have less negotiating power when dealing with brokers.
Tips for booking loads on the trucking spot market
Calculate your operating costs
Before booking a load, it is a good idea to understand your operating costs and cash on hand. This will help you to ensure that you’re not spending more money to travel than you’ll make on the load. SmartHop’s free trucking expense calculator can help you do this easily.
Think beyond RPM
Say you have two load options: one has a rate-per-mile (RPM) of $3.25 and the other has a RPM of $2.50. Which is better? While it might be tempting to take the higher RPM, there are plenty of other factors to consider before making a decision.
You’ll want to think about:
- The market you’re headed to. If you bring in more money on a load only to find yourself traveling to a cold market, you might end up earning less in the long run if you cannot find a profitable load on the way out. Plan the entire trip instead of thinking only about the next load.
- The freight you’re hauling. Be sure to consider the load’s weight to avoid costly wear and tear on your vehicle. Additionally, certain loads can lead to hidden or unexpected costs and possible delays.
- Transit time, site conditions, and other shipping requirements. In this industry, time is money. Get as much information as you can about the appointment times, where you’ll be loading and unloading, and any special requests that have the potential to cause complications or delays.
If you bring in more money on a load only to find yourself traveling to a cold market, you might end up earning less in the long run if you cannot find a profitable load on the way out. Plan the entire trip instead of thinking only about the next load.Share Tweet!
Do your research
Load boards provide an opportunity to grow your network and build relationships with different shippers and brokers. However, it is important to understand who you are working with before accepting a load. Understanding credit ratings and days-to-pay information on a broker or shipper improves your chances of making the right business decisions and getting paid on time. Avoid loads from brokers with no or low credit.
Understand market trends
When negotiating with brokers, it is helpful to have a strong grasp on what current RPMs look like, as well as seasonal freight trends. For example, during the holiday season, when demand for spot market truckers is high, you’ll likely be able to get a better rate.
SmartHop can help you navigate the spot market
Finding the right loads is essential for your independent trucking business, especially with operational costs rising. But, being an independent trucker doesn’t have to be a challenge.
SmartHop is a full-service trucking solution that helps you earn more while stressing less. Our technology helps you move your trucks to hot markets and prevent dead-hauling. Once you’ve found a load you like, we can handle the rest — from negotiating with brokers on your behalf to supporting your drivers on the road. Through our powerful partner network, we also help you reduce your overhead expenses by getting you the best possible rates on everything you need to run your business.
Try it out for yourself
If you want access to loads from top industry load boards and brokers, including support planning a long-term strategy to earn more, sign up for a free trial today.