In order to effectively manage your freight spend, it’s important to understand the different pricing options you have when negotiating freight rates. Both contract rates and spot rates offer a different value proposition, and one is not always better than the other. The only way to gain full control over your freight spend lies in finding the perfect balance between the two and knowing when to utilize them. Here are some benefits and shortfalls for both freight pricing options.
Contract Rates
A contract rate is the rate a motor carrier, freight broker or logistics provider agrees to use when moving a shipper’s freight in a set lane over a specific period of time. Contract rates have a fixed term, typically one year, and they offer the security of both price and capacity. While many shippers use contract rates, they can be a gamble depending on how the market shifts. Carriers get stuck with cheap loads when the market is high but they can profit big when the market is down.
Spot Rates A spot rate is the price a freight service provider offers a shipper at any given time to move their shipment from Point A to Point B. Spot rates are based on market conditions at the time you are quoted for an immediate settlement of a service (in this case shipping). Since spot rates follow the fundamental concept of supply and demand, an increase in capacity will lower prices, while a decrease in capacity will raise prices. Like contract rates, exclusively using spot rates is a gamble depending on the market conditions at the time of your shipment.
Finding The Perfect Balance Being able to assess freight pricing by reviewing the current market and setting expectations for the coming days or weeks is hard to do. The best way shippers can find a balance between contract rates and spot rates is to keep tabs on the current market rates while taking advantage of existing contracts when appropriate. Typically, contract freight rates are the preferred method of pricing for higher volume shippers because it locks in a price and sets expectations for a high level of service.
In order to effectively manage your freight spend, it’s important to find the perfect balance between contract rates and spot rates. If you’re still confused about what pricing option works best for you, contact us today for a free freight analysis.
Gretchen Blough, Licensed Customs Broker and Brokerage Manager for Logistics Plus, was featured in the January 2020 Special Edition of Inbound LogisticsMagazine. The article, titled Small Ports Big Benefits, was written by Sandra Beckwith and provides the benefits of utilizing smaller, lesser-known ports for shipping. Interview comments from Gretchen are included in the 4th benefit section of the article (page 192-196), which discusses moving freight through customs quickly.
The coronavirus outbreak in China has been causing a ripple effect across global supply chains over the past several weeks. As a global logistics provider, Logistics Plus is uniquely positioned to have our hand on the pulse of this situation. Below are several key status updates and insights as of February 17th, 2020.
On February 10th, most of China resumed work. In Shanghai, millions of people returned to work, but most are still working from home. Those who go outside are obligated to wear medical masks and protective gear. Places where people gather such as factories and public parks are closed or have limited operations until February 20th. Major highways in the highly infected cities are also shut down.
The government has blocked cities which are more seriously affected by the virus like in Wenzhou and Hubei Province to avoid further infection. No one can go back to work in these cities until further notice is given from the government.
Air Freight Updates:
American Airlines – Suspended flights until late April
Austrian Airlines – Suspended flights until the end of February
Delta Airlines – Suspended flights until late April
Qatar Airways – Suspended flights until further notice
United Airlines – Suspended flights until late April
Virgin Atlantic – Suspended flights until late March
Many more
Ocean Freight Updates:
Most carriers are not returning to work until February 17th. Major challenges include the introduction of blank sailings, port omissions and potential capacity reductions by carriers due to factory closures and low demand.
All major seaports however remain open and operational. Warehouses across China have opened, but most with limited staffing.
Drayage has resumed on a very limited basis and predominantly only in the major cities. Most require advanced bookings and have reported extended transit times due to driver shortages.
Drayage costs have been impacted the most because of the virus, as ports are congested, and capacity is tight.
Trucking Updates:
Inter-city and inter-Province trucking services remain at a standstill.
Many drivers haven’t been able to return to their place of work, due to travel restrictions.
Many drivers can’t leave their living quarters to go to work, due to movement restrictions.
Various cities have introduced lock-down procedures to restrict movement of non-local citizens, especially in Jiangsu and Zhejiang. Therefore, drivers aren’t accepting shipments to or from those places, as there are quarantine risks for them.
The overall shortage of drivers remains a challenge.
Rail Updates:
The China – Russia border remains open as the Ministry of Transportation in Russia explained that the Decree from the Russian Government does not apply for cargo trains.
There is currently no impact on rail freight crossing borders to and from China for the time being.
If you are shipping to, from, or within the impacted areas, delays are expected. If you have any questions, or need help making specific shipping arrangements, please contact your designated Logistics Plus representative. If you don’t know who that is, you can contact us online at www.logisticsplus.com/contact-us or by calling 1.866.564.7587.
Logistics Plus Partners With RIO to Restore Integrity to World’s Oceans
Restoring Integrity To The Oceans, Inc. is dedicated to making the oceans safe for all life above and below the water for generations to come.
ERIE, PA (February 11, 2020) – Logistics Plus Inc., a leading worldwide provider of transportation, logistics and supply chain solutions, is proud to announce its partnership with Restoring Integrity To The Oceans, Inc. (RIO) to support ocean cleanup initiatives.
Logistics Plus, a SmartWay Transport® Partner, aspires to be a leader in environmental sustainability practices. Through its partnership with RIO, Logistics Plus will assist with all aspects of supply chain management. This includes transportation of the plastic debris collected, international regulation assistance, cross-border trading, and navigation of customs and global trade compliance. Logistics Plus is committed to using its global network of customers and partners to connect RIO with people who support its mission of restoring integrity to the World’s oceans.
“Removing plastic waste from the oceans for recycling requires solid logistics and transportation management, and Logistics Plus is proud to be doing its part to help with this commendable initiative,” said Yuriy Ostapyak, Director of Global Operations for Logistics Plus.
RIO has been collecting plastic waste from Earth’s oceans since 2019 at locations around the world. The majority of materials collected can be recycled in some fashion. Some material is recycled directly into new products, such as tennis shoes, while some may be recycled into high value petrochemical products. The largest ocean cleanup to date hosted by RIO was on February 7th and 8th, 2020 in Jakarta, Indonesia. An astonishing total of 11,000 people signed up and participated.
“While we talk about different oceans and assign them various names, we really only have one ocean. After decades on the water I could not continue to take from the ocean without giving back and working to protect the oceans for future generations,” said Kieran Kelly, CEO and Co-Founder of RIO.
“Our partnership with RIO is just one of the many important initiatives we are undertaking to support our sustainable development goals,” added Ostapyak.
About Restoring Integrity To The Oceans, Inc. Restoring Integrity To The Oceans (RIO) primary objective is to mitigate the amount of plastic that is going into the World’s oceans and work to significantly reduce and remove the plastic waste in the major waste collection areas in the World’s oceans. The primary effort for RIO is preventing the introduction of and reclaiming plastic materials from the ocean, which is accomplished through innovative techniques that vary based on the size and concentration of the plastic waste material encountered. Furthermore, RIO has long term plans to develop products directly to help recycle plastic waste material and promote recognition and education for reducing plastic waste in the oceans. Learn more about RIO online at oceansintegrity.org.
Audio Comments for WPSE Radio
About Logistics Plus Inc. Logistics Plus Inc. provides freight transportation, warehousing, fulfillment, global logistics, business intelligence technology, and supply chain management solutions through a worldwide network of talented and caring professionals. The company was founded over 23 years ago in Erie, PA by local entrepreneur, Jim Berlin. Today, Logistics Plus is a highly-regarded fast-growing and award-winning transportation and logistics company. With a strong passion for excellence, its 450 global employees put the “plus” in logistics by doing the big things properly, and the countless little things, that together ensure complete customer satisfaction and success.
The Logistics Plus® network includes offices located in Erie, PA; Akron, OH; Baltimore, MD; Birmingham, AL; Buffalo, NY; Charleston, SC; Chicago, IL; Cleveland, OH; Dallas, TX; Des Moines, IA; Detroit, MI; Fort Worth, TX; Haslet TX; Houston, TX; Laredo, TX; Lexington, NC; Los Angeles, CA; Melbourne, FL; Nashville, TN; New York, NY; Olean, NY; Ontario, CA; San Bernardino, CA; San Diego, CA; San Francisco, CA; Tampa Bay, FL; Australia; Bahrain; Belgium; Canada; China; Colombia; Czech Republic; Egypt; France; Germany; India; Indonesia; Kazakhstan; Kenya; Libya; Mexico; Netherlands; Poland; Saudi Arabia; Singapore; Taiwan; Turkey; UAE; Ukraine; Uganda; and United Kingdom; with additional agents around the world. For more information, visit www.logisticsplus.com or follow @LogisticsPlus on Twitter.
Logistics Plus is a leading supply chain solutions provider for the furniture, fixtures and equipment (FF&E) and the operating supplies and equipment (OS&E) industries. From purchase order to installation, our FF&Plus™ management system is a highly-customizable, turnkey solution for project managers, buyers, designers, and installers. FF&Eplus™ has been developed through years of experience working with some of the largest, most successful co-working, co-living, and hospitality companies in the world. Now, it’s part of our growing suite of technology solutions. Here are some of the many features and benefits FF&Eplus™ offers:
Developed in-house by Logistics Plus and customized for each client using our innovative MyLogisticsPlus™ web platform.
Designers can shop from available and incoming inventory in real-time. Bill of Materials functionality is supported.
Installers are able to export ‘move-in packages’ to help them with installations.
Warehouse associates receive automatic warehouse orders to pick and ship to install sites.
Project Managers can track the status of their projects, shipments and SKU’s. They can also manage the budgets at a granular and aggregated level.
Cloud hosting for all your documents. Documents for PO’s, Projects and SKU’s can be uploaded and shared with the whole team.
Ability to issue PO’s, track statuses and create notices for the warehouses to notify of the incoming inventory.
A catalog of approved SKU’s, categories and vendors available for designers to allocate from.
The mobile app allows you to scan inventory at the site and warehouse as well as track your shipments.
To learn more about the features of FF&Eplus™, watch the video below or contact us today to schedule a free demo. Join our growing list of successful, satisfied FF&E clients that have ramped up their speed to market! From P.O. to Install, We Do It All™
To contact us, you can email ffe@logisticsplus.com or complete the short form below.
Thank you to everyone who attended the 2020 Logistics Plus Holiday Party in Erie, PA on January 24th. The annual Holiday Party is just a small way for us to show our appreciation to our many dedicated employees, supportive partners, and awesome customers! To both our repeat and first-time attendees, we sincerely hope you enjoyed your evening with us. Included below is a Flickr slideshow of all the photographs taken at this year’s event. We wish you nothing but the best in 2020!
We’d also like to give a special thanks to the following people who played a big part in making this year’s event a success:
In order to effectively manage your freight spend, it’s important to understand the different pricing options you have when negotiating freight rates. Both contract rates and spot rates offer a different value proposition, and one is not always better than the other. The only way to gain full control over your freight spend lies in finding the perfect balance between the two and knowing when to utilize them. Here are some benefits and shortfalls for both freight pricing options.
“Removing plastic waste from the oceans for recycling requires solid logistics and transportation management, and Logistics Plus is proud to be doing its part to help with this commendable initiative,” said Yuriy Ostapyak, Director of Global Operations for Logistics Plus.
Logistics Plus is a leading supply chain solutions provider for the 
Thank you to everyone who attended the 2020 Logistics Plus Holiday Party in Erie, PA on January 24th. The annual Holiday Party is just a small way for us to show our appreciation to our many dedicated employees, supportive partners, and awesome customers! To both our repeat and first-time attendees, we sincerely hope you enjoyed your evening with us. Included below is a 
