I hear all the time the argument that someone is hauling cheap freight. That is a relative term. One person may have their operation fine tuned to a level that they can make a decent profit over what someone else can haul for. One person's cheap rate is another person's decent rate. There are a lot of variables here. Even the part of the country a person lives can determine this. The cost of living (other than the truck itself) is a lot lower with the same standard of living in, say, the Midwest, than it is in New England. And one person may have their truck running mpg figures in the 7's while another can't seem to get out of the 5's. All of this goes into what is considered a "cheap" rate. It does not always mean that someone is a "bottom feeder" just because they will haul for a rate that another thinks is too cheap. Each operation is different. I will concede that some do haul for lower than they can actually make a decent profit at or even take a loss. But they will soon be out of business and no longer a problem. The first quarter of 2009 was a good example of weeding out those that were not running their business well. 80,000 trucks were taken off the road in that quarter of the recession.

 

1st qtr of 2009 also saw over 27,000 new authority's granted.

 

Some rates are contract where a carrier or broker signs a contract with a shipper. Rates are usually fixed for the term of the contract with a fluctuating fsc to reflect what is going on with fuel at any given time.

 

I struggled with my post and I know I didn't ask my question very clearly. I'm interested in the terms. There's the "spot market", as opposed to what? What is the rest of the market called?

 

im gone take a shot in the dark, spot market=daily rate in a given area, compard to contrated rate(time fixed+fsc) between shipper/reciver and huller

this is just a gess of the terms and what your asking

im not alwas right. was fond wrong one time in the first grade but that was bye a show of hands.........think it was fixed some put up two hands.

 

A contract. Or a contracted rate that was negotiated in advance, subject to terms and conditions of course.

 

A rate should either be contract or spot rate. I can't think of anything else it could be called. A contract rate is when you sign a contract at a certain rate for a fixed time period. Most are calculated annually, but could be for longer or shorter time frames. A broker may have a contract with a shipper but sell it to carriers on the spot market. A broker agrees to move a certain number of loads for a shipper at a fixed rate. He can keep anything over and above what he can get a carrier to haul the load. Those loads often have a limited time that they must be picked up. If the broker fails to cover the loads he could pay a penalty or lose the account. The broker and shipper operate on contract rates. The broker and carrier may operate with spot market rates. Some consider spot market as those loads offered at the last minute. I consider most anything that is offered that is not contracted at a fixed rate to be spot market. With spot market rates the rate can be negotiated. With contract you are locked in to a rate for the duration of the agreement. I prefer the spot market since there is a greater opportunity to move the rate up.