How Instant Freight Quotes are Calculated | Convoy

HOW INSTANT FREIGHT QUOTES ARE CALCULATED

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A freight quote is an estimate of what the cost of shipping will be based on the information you provide, including pickup and delivery location, date, and commodity type. The freight quote acts as an agreement between the shipper and the carrier or broker that they will try to service the freight at that rate. The best partners provide accurate, to-the-dollar freight quotes where the final invoice matches the initial quote.

Shippers can get freight quotes for a variety of commodity and equipment types, including full truckload (FTL) and less-than-truckload (LTL) shipments. Most FTL instant freight quotes are for dry van, refrigerated or flatbed trucks.

WHY USE ONLINE FREIGHT QUOTE CALCULATORS?

Online freight quote calculators help shippers get their freight moving, fast. Previously, businesses would have to call or email each of their carrier and broker partners to ask for quotes, wait for a response and then negotiate back and forth before landing on a reasonable rate. With the dawn of new logistics technologies, specifically digital freight networks and tech-enabled matching, many companies are now offering instant freight quotes online. These freight rates are calculated via computer algorithms, and give shippers a guaranteed, instantly bookable rate.

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HOW ARE FREIGHT COSTS CALCULATED?

Every provider has a different way of calculating the cost of freight, although they often use some combination of the date, weight and lane to determine a rate. According to MIT Supply Chain Management, traditional carriers price their bids based on a rudimentary cost-plus model. Digital freight networks like Convoy use machine learning (ML) to take a more comprehensive quote to generate accurate freight prices.

Convoy’s machine learning models analyze millions of data points, including historical shipment records, real-time volume, capacity indicators, seasonality shifts, shipment time of day, macroeconomic factors, regional carrier density, carrier quality, and more. By using ML for freight pricing, Convoy is able to respond instantly to tender requests and generate rates that represent a fair, accurate reflection of the freight market.

HOW DO I GET A FREIGHT QUOTE CALCULATED?

Getting a freight quote is easy, most online freight calculators simply require you to enter the pickup and delivery location and date and will provide you with an instant quote. You can increase the accuracy of these quotes by adding additional information such as weight, commodity type and accessorials.

Try Convoy’s freight quote calculator here.

THREE QUESTIONS TO ASK ABOUT YOUR ONLINE FREIGHT QUOTE

Many carriers and brokers now offer quotes through online freight calculators. While online quotes may show attractive prices up front, the final invoice may exceed the original online freight quote. Here are a few considerations for vetting whether the price you see is the price you’ll actually get.

Is this freight rate guaranteed? 

Some freight providers provide rates by using pricing models that are prone to error. For example, when a broker prices based on what they paid for the truck last week plus a markup, it may be hard for them to stand by their quote if truckload rates suddenly rise due to an unexpected demand surge. 

We have heard shippers share stories of carriers and brokers requesting higher fees to cover loads, after they had already agreed upon a lower price. One customer said he experienced hikes of 40% above the initial online quotes when working with other freight providers. 

When calculating freight rates, look for a provider that generates pricing based on real-time data and reflects accurate market rates. Seek out carriers or brokers who guarantee coverage at the rate they quote. 

Convoy uses sophisticated technology to price with up to the minute on market information. Once we make an offer, we don’t reprice our quote. Since we stand by our original prices, our customers are never surprised by a discrepancy between a quote and their invoice.

Will the carrier or broker give back or fall-off the load? 

When you book your online shipment, make sure the provider is guaranteeing coverage for it. A carrier or broker may have a driver available, but if that driver falls off, they might come back to you and return the load. This causes a last minute scramble for coverage, and often means you are paying much more.  

Unfortunately, most freight companies don’t offer a coverage guarantee when they provide a quote, leaving shippers shippers vulnerable to fall-off.

Convoy guarantees coverage for every load we bid on. Our massive carrier base and our technology enable us to guarantee load coverage at the price we quote. This provides a level of peace of mind that most other freight companies can’t match. 

Will my shipment be serviced on time? 

If the rate you see looks like a great deal, make sure the carrier or broker can service the shipment as agreed to. Everyone on a transportation team knows the headache and wasted time that comes from tracking down missing shipments and rescheduling missed appointments. No one enjoys informing a customer that their shipment will be late. 

The best freight partners use GPS tracking and offer real-time supply chain visibility to proactively monitor shipments and identify potential issues before they occur. 

Convoy offers 24/7 visibility into every load we arrange. We provide total transparency, from initial tender to final delivery, so you don’t have to waste time tracking down trucks. With shipment statuses that are accurate to the minute, your transportation team can operate more smoothly knowing that your shipment is on schedule.

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FREQUENTLY ASKED QUESTIONS ABOUT FREIGHT QUOTE CALCULATORS

What is the average rate per mile for hauling freight?

According to the American Transportation Research Institute (ATRI) the average trucking cost per mile in the U.S. was $1.65 in 2019. However, this rate can vary significantly month-to-month and even week-to-week. This rate can be impacted by the current market conditions, popularity of the lane you are running, long-haul versus short-haul and other factors.

Download our Annual Freight Insights 2020 Report to see Convoy’s data about 2020’s historic logistics trends.

Why is LTL freight so expensive?

LTL (less than truckload) freight is more expensive than truckload for several reasons. LTL shipping involves a higher rate of fuel consumption because goods are transported to several locations during transit. Furthermore, LTL shipments are often moved from one truck to the next and held at distribution centers. The high touch nature of these loads adds to the cost of transportation. For these reasons, some shippers choose to move their LTL freight as full truckload shipments. Using full truckload can lower overall costs and provide a more predictable timeline.

What is the cheapest way to ship freight?

Freight shipping costs vary greatly depending on the current market conditions, the type of goods being transported, and the pickup and dropoff points being serviced. Over-the-road truckload shipping can often be the most economical option as the fuel and operating costs are much lower than that of air freight and there is more flexibility than intermodal transportation.

Read our 15 Ways to Save on Freight white paper to learn how a digital freight network opens new ways to save time and money in your supply chain.

What are some important factors to consider, besides price, when evaluating a freight quote?

Carriers vary in quality and compliance, including their on-time-pickup and on-time-delivery, as well as their adherence to DOT standards. Some brokers maintain quality and compliance scorecards to determine which carriers meet specific standards. There are several questions to ask your freight broker or 3PL provider to understand how they manage compliance risks and carrier safety standards.

CONVOY: FREIGHT QUOTES YOU CAN TRUST

Convoy generates pricing in real-time using machine learning algorithms that account for current market conditions and shipment data to give you the best possible quote at a rate that we can guarantee. Calculate real-time quotes for dry van truckload and refrigerated freight by simply dropping in your pickup and delivery location. Provide additional details to increase the accuracy of the quote before booking.

The price you’re quoted is the price you pay, guaranteed. Convoy will never come back to you and ask for more money on a spot load. We also guarantee 100% coverage, which includes automatically adjusting carrier assignments on your behalf in the rare event of a fall-off at no additional cost.

Compare your freight quotes to other providers

Once you use Convoy’s freight quote calculator to generate a rate for your shipment, you can compare it to the rates you have in-hand. The instant quote for a Convoy spot shipment is accurate up to the minute and reflects real-time market conditions and the specific requirements of the shipment.

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Compare Convoy’s freight quote to the market

With automated quote benchmarking, shippers using the instant freight quote calculator Convoy’s rate alongside an indicator of how our rate compares to the market. Convoy’s quote tool references industry pricing indices as well as historical quote data to indicate whether the rate is lower, about the same, or higher than prevailing market rates. Businesses can use this as a way to gain additional context around the rates they are seeing and what they should consider a competitive rate.

SATISFIED WITH YOUR RATE? BOOK WITH A CLICK.

It’s not just about calculating freight quotes, you can also book your shipment on-demand at the rate you see. Just add shipment details and click “book shipment.” Convoy will match your load to our network of hundreds of thousands of high-quality drivers. You can track your shipment’s progress in real-time through our track and trace feature.

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