EOBRs will change freight prices

DENVER, Colo. – Here’s a side effect of EOBRs that you might not have seen coming: You’ll be negotiating rates differently.

The trend is presaged by Transport Capital Partners, and explained in their First Quarter Business Expectations Survey, which was released this week.

The report says that even though freight rates have risen in the past quarter, most rate hikes were restricted to under 5 percent.

But rates are not the complete picture. Fuel surcharges aren’t covering costs like they used to and finally, when it comes to establishing rates, accessorials are becoming an increasingly popular negotiating tool.

Which is where EOBRs come in.

Says Lana Batts, TCP’s Partner, "shippers are going to have to pay for tying up equipment and drivers."

Batts and her colleague Richard Mikes both say more carriers are likely to assign trucks to shippers who will work with them to minimize turnaround times and improve asset utilization.

The TCP survey found that 40 percent of the carriers report that broker freight services account for less than 5 percent of their revenues and that 35 percent report six to 15 percent of their revenues from brokers.

And mostly it’s small carriers looking for backhauls.

Says Batts: "This reflects the traditional reliance on brokers by smaller carriers for return hauls as their outbound length of haul increases and improved technology such as electronic load boards on cell phones, and laptops are available."

Both Mikes and Batts envision a potential shift over time to even a more direct connection between carriers, shippers and brokers with the advent of real-time electronic bidding on loads by prequalified carriers.


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