Bidding on Freight Loads: How it Works, Tips

After working through the steps of starting a trucking business, your next natural step is to find loads to haul. For many, understanding how to submit freight shipping bids is a new challenge in and of itself. Regardless, learning how to bid on freight loads is essential if you wish to run a successful business.

In this guide, we’ll help you understand the ins and outs of freight bidding, including freight bidding sites and platforms you can use to submit freight bids. By submitting competitive freight hauling bids that match your business plan, you can set yourself up for long-term growth.

What Is Freight Bidding?

Freight bidding is the process that carriers use to get trucking contracts and find loads. When shippers have a load ready to be transported, the carriers will submit their bids. Shippers then choose a bid based on the cost-effectiveness of the proposal while also accounting for extra factors like the carrier’s reputation and delivery timeline.

When you bid on hauling freight, you are essentially throwing your hat in the ring to say that you are willing and able to transport a load.

How Bidding on Freight Contracts Works

The freight bidding process starts when a shipper posts a load on a freight bidding platform. The listing includes all relevant details for the load, such as the pick-up and delivery points, the required delivery timeline, the type of cargo to be hauled, and so on.

Trucking companies can then look at the listing and submit their freight-hauling bids. The bid amount will usually be based on the company’s standard rate while also accounting for factors like supply and demand, seasonality, route complexity, and the type of freight involved.

After this, the shipper will look over the different bids and pick the one that seems like the best fit for their needs. The shipper will draft a proposal to the carrier, who can sign the proposal or negotiate some of the terms of the freight contract. Once a carrier has agreed to a contract, they are expected to follow through with the job.

Different Types of Freight Bids

A shipper might be looking for several different types of freight bids. Before you bid on trucking jobs, make sure you understand the type of bid the shipper needs.

Annual Contract Bids

An annual contract bid is a bid for a long-term agreement between the shipper and the carrier. The listing posted to freight bidding boards should project the expected shipping volume, the duration of the contract, and any other requirements.

Annual contract bids lock in the shipping rates for the entire lifetime of the contract. This rate stays the same until the end of the contract, even if the market and your operating costs change. The shipper generally gets first-come, first-served access to your trucks.

Spot Market Bids

Spot market bids offer a fixed rate for a single shipment. Many shippers will request spot market bids for smaller shipments or when they need to make additional shipments beyond the scope of their annual contracts.

Spot bid freight rates are more prone to fluctuations from seasonal supply and demand, fuel surcharges, and so on. Many carriers will use spot market bids to bid on small freight loads to avoid empty hauling miles. Thanks to their flexibility, spot rates can help you get higher-paying loads by not locking you into a long-term contract.

Mini-Bids

Mini-bids are a shortened version of annual contract bids, usually lasting three to six months. Shippers will use these bids to try to get competitive rates as they adjust to market changes. They may be requested for a short-term freight project or to help a shipper deal with times when they see higher seasonal demand.

Mini-bids are also common when a shipper is opening new shipping routes or trying to test new carriers. In some instances, a mini-bid could lead to annual contract work.

Dedicated Service Bids

Dedicated freight bids offer a long-term setup where a shipper is looking for a specific amount of driver capacity and service requirements for a shipping lane. While other annual contract bids offer truck space on a first-come, first-served basis, dedicated service bids generally have more consistent load requirements. Carriers commit a level of driver capacity to match the shipper’s committed amount of freight.

Benefits of Freight Bidding

Freight bidding obviously helps shippers by enabling them to find and compare reliable, cost-effective carriers for their shipments. However, freight bidding also benefits carriers. Thanks to trucking bid boards, carriers have greater access to potential loads that match their work preferences. The ability to submit freight bids online also makes it easier than ever to reach out to potential customers, allowing for faster and more effective customer acquisition.

By using freight bidding websites, carriers can also gain greater visibility into supply and demand for their area, as well as current rates. This helps you adjust your rates accordingly so you can offer competitive yet profitable bids.

Freight bidding also gives carriers the flexibility to choose which loads they want to bid on based on factors like routes, profit margin, and current capacity. This can help you with practices like bidding on backhaul loads to reduce empty miles. When done right, freight bidding will increase your profitability.

Where to Find Freight Contracts to Bid On

There are several potential options carriers can use to get loads for their trucks. Here’s where to bid on loads.

1. Online Load Boards

Load boards that let you submit freight bids online are the most accessible option for finding potential contracts. Top load boards like DAT, DirectFreight, and 123Loadboard offer millions of job opportunities. Many also offer additional information that can help you decide which loads to bid on, such as shipper credit scores and load planning tools.

2. Dispatch Services

Many busy carriers prefer to use dispatch services to search for loads and handle other paperwork. Dispatch services charge a flat rate or a percentage fee for each load for their services. This allows you to focus on hauling freight while letting others handle bidding on freight loads, accounting, and more.

3. Freight Brokers

Rather than submitting bids themselves, many carriers will use a freight broker as a middleman between themselves and shippers. Brokers connect shippers and carriers, negotiate rates, and manage all paperwork and communication (including disputes). They serve as the point of contact for both parties to streamline the shipping process. However, they may charge up to 20-25% of the load.

4. Government Contracting

You can also bid on trucking contracts with the government through the Department of Defense, the General Services Administration, and other departments. You need to register with the System for Award Management (SAM), develop a capability statement, and create detailed and compliant proposals when submitting bids to the government. The U.S. Department of Transportation’s procurement portal is a great resource for finding upcoming opportunities.

5. General Networking

Finally, never overlook the power of networking. Building strong relationships with freight brokers, dispatchers, and shippers can pay off by helping you get more opportunities later on. Attending networking events, reaching out to people online, and being a polite and honest business partner can all help you get more opportunities for shipments.

Tips for Bidding on Trucking Contracts

Bidding on trucking contracts can seem intimidating, but by following a few key best practices, you can find high-paying loads and ensure that your bids are competitive.

1. Be Mindful of Special Certification or Equipment Requirements

Some types of freight, such as hazardous materials and heavy haul and oversized loads, require special equipment, certifications, training, and permits. Obtaining the necessary certifications can improve your industry reputation and enable you to bid on these higher-paying jobs. Make sure you are fully qualified for a job before you submit a bid.

2. Know Your Operational Costs

Fuel prices, truck maintenance, and driver wages can all impact a load’s profitability. Accurately calculating your fuel surcharges and other operating costs is essential so you can cover your expenses and submit a bid that will allow you to make a profit.

3. Consider Route-Specific Concerns

Successful freight bids should be adjusted based on market demand and supply, seasonality, and the distance and complexity of the route. Bids should reflect how challenging the route is while also being mindful of the urgency, volume, and availability of shipments. This will help you set a bid that is in line with the market.

In-Summary: Bidding on Freight Loads

Trying to bid on freight contracts can feel overwhelming—but it doesn’t have to be. By understanding the different types of bids and contracts, where to bid on truck loads, and best practices for submitting a competitive and profitable bid, you can find loads that match your business goals. With a consistent approach to freight bidding, you will find steady work for your trucking business and maximize your profits.

Freight Bidding FAQs

What are the best freight bidding sites and platforms?

Some of the best freight bidding platforms include DAT, TruckStop, and 123Loadboard. These tools offer a high number of loads to bid on, as well as extra resources to help you judge a shipper’s creditworthiness and other aspects of the load and route.

How do freight brokers bid on loads?

Freight brokers bid on freight shipments through load boards and shipper lists. They may also use referrals, direct contact with former clients, and possibly even cold calls to find and bid on loads.

How do you bid on military freight?

You’ll need to register with the Department of Defense’s System for Award Management (SAM), obtain a carrier code, and meet all compliance requirements. After this, you’ll be able to bid on military freight using the Defense Transportation System (DTS).

How do you bid on government trucking contracts?

As with bidding on military freight, you need to register with the System for Award Management (SAM), receive a unique entity identifier, and meet compliance requirements to bid on government trucking contracts. Contracts are available through SAM.gov, while upcoming opportunities can be found through the DOT procurement portal.