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Apr 3, 2020
by Aaron Huff, Senior Editor, Commercial Carrier Journal

This article first appeared on Commercial Carrier Journal.


The sales process of freight brokers and motor carriers often involves multiple departments such as pricing, operations and sales as well as time-consuming visits, phone calls and emails.


In the Digital Age, new technologies and data sources are making freight transactions more efficient for buyers and sellers to close deals without a need to master the art of sales or negotiations.


Increasingly, freight brokers and carriers are using new “Book it Now” features in freight matching websites like that allow brokers to post real-time rates for preferred carriers to instantly book loads and receive automated confirmations.


To further speed negotiations in the spot market, freight brokers and motor carriers are also using historical and real-time pricing indexes, such as DAT RateView, to see trends by specific lanes and freight types.


The pricing indexes also account for real-time factors such as load-to-truck ratios for origin and destination markets.


Predictive rates


Increasingly, more attention is focused on speeding up negotiations for contract freight with forward-looking market rates.


Large freight brokers and carriers may already have the resources to merge broad economic data with industry data to forecast rates for contracts. Now, the vast majority of fleets can have the same type of forecasting information for pricing and negotiations.


In the next month, DAT plans to launch a Predictive Pricing model. The new product will be added as a feature in the company’s RateView application to give freight brokers and carriers a future rate index, said Ken Adamo, DAT chief of analytics.


Companies that use the new model can view rate trends up to 52 weeks in the future. The model uses historical data and economic variables that “lean more on art than science,” he said. “We’re not fortune tellers. We are helping customers understand where rates are headed.”


Smaller companies will access the new Predictive Pricing model online through the RateView user interface. Larger, more sophisticated users have the option of integrating data feeds from RateView, including the new model, directly with their internal systems using APIs.


Shippers, freight brokers and carriers will use the model differently, he said. In the spot market, for example, a shipper or broker might decide to move a load two weeks ahead of schedule based on information that shows rates changing from $1.50 a mile to $1.60.


Meanwhile, carriers may only be interested in looking a day or two ahead to see the predicted rates for areas where their trucks will land. For contract rates, they may also want to see forecast rates for the next year.


Adamo compares DAT’s new pricing model to the “spaghetti charts” meteorologists use to predict the path of a hurricane, since the model takes into account “what-if” scenarios like manufacturers drawing down inventories or more pessimistic cases such as an economic recession from COVID-19.


DAT analysts focus most of their time developing a two-week forecast, he said, and can change the weights of variables in the model to account for likely economic scenarios. The model updates every night.


Automating negotiations


Larger freight brokers and carriers might also consider more advanced pricing and negotiation tools that can replace personal interactions.


Zilliant has developed such a platform called Price IQ used by sellers of commercial services, including transportation, for “intelligent automated negotiation.” The approach combines data science, price optimization and APIs to increase efficiencies, said Pete Eppele, senior vice president, products and science.


The company began 20 years ago in the wake of the dot-com era and moved its on-premise software platform to a cloud-native architecture after 2011.


Transportation and logistics companies are able to use the Price IQ platform to set market-relevant pricing based on factors such as shipment length, weight, accessorial services and more, and determine who to give discounts according to what makes sense for the overall business.


When leaving pricing decisions up to salespeople, “you either leave money on the table because you are over discounting or push business away because you are above market,” Eppele said. Zilliant uses historical data, data science and software tools to analyze customer buying patterns and establish custom rate cards.


The technology identifies what customers salespeople should talk to and what prices to talk to them about to make interactions more effective, he said.


Zilliant typically does business with companies that have more than $200 million in revenue, Eppele noted.


Securing pricing and negotiating freight transactions used to require personal interaction, but new and emerging technology is helping transportation and logistics companies move away from high-touch sales processes.