How to Use Spot Market Freight Rates to Get Higher-Paying Loads

Last Updated August 14, 2024

Both carriers and owner-operators want the best payment possible for hauling loads for their customers. While some drivers and carriers prefer the consistency of contract rates, spot market freight rates are the best way to increase your earning potential in the short term. 

Spot rates in trucking are tricky because they fluctuate based on supply and demand. Even so, some truckers score big with the freight spot market. In this blog, we’ll guide you through the ins and outs of spot freight rates, share how to interpret current freight rates, and offer strategies to secure higher-paying loads.

What Is a Spot Rate in Trucking?

A spot rate, also called a spot quote, is the price your customer pays for transporting freight on the spot market, usually for a one-time shipment.

It’s essential to understand what a spot rate is if you want to maximize your earnings. While spot rates vary with the market, staying on top of current freight rates can help you identify the best times to accept loads at these higher rates.

However, keep in mind that your business setup or job could affect your ability to accept spot rates. For example, a leasing-on owner-operator might not have the freedom to choose loads or routes with spot market freight rates.

How Are Trucking Spot Rates Determined?

Trucking spot rates are determined by several key factors, including:

• Supply and demand: This is the primary driver of spot rates in trucking. The number of available trucks and demand for shipping services affects how much you can earn. Spot market rates tend to increase if there are more loads than trucks. The opposite is also true, with rates decreasing when more trucks are available than loads to ship.
• Time of year: Peak seasons like the holiday rush can cause a spike in current freight rates because of increased demand.
• Weather: Severe weather conditions disrupt the supply chain and affect spot market rates. For example, major storms can create a local shortage of trucks, driving up spot freight rates in the area.
• Fuel costs: Spot market freight rates fluctuate with fuel prices. Higher fuel costs generally increase spot freight rates because carriers need to cover these higher expenses.
• Economic Trends: The health of the overall economy also has a big impact on spot market freight rates. Consumer demand for products affects national average freight rates, with demand skyrocketing when consumers shop more.

What Factors Influence Trucking Spot Rates?

Several factors can influence trucking spot rates, including:

• Regulations: Occasionally, new regulations will pass and affect spot rates. For example, driver safety mandates, emission standards, and hours of service have an impact on spot rates.
• Freight type: The nature of what you’re transporting will put you in a different spot rate category. For example, reefer spot rates for refrigerated goods are usually higher because they require specialized equipment and care.
• Location: Spot market freight rates differ by region. For example, areas with major ports or manufacturing hubs usually have higher trucking spot rates because of increased local demand.
• Load-to-truck ratio: Load-to-truck ratio is the number of available loads compared to trucks in the area. Higher ratios mean there’s increased local demand for trucks, increasing spot market rates.

Benefits of Trucking Spot Rates

While there are benefits to both contract rates and spot market freight rates, spot rates can be especially attractive if you’re looking for additional earning opportunities. It’s one of the best ways for single-truck businesses to come out ahead.

Spot freight rates offer several benefits, such as:

• Potentially higher earnings: Since you aren’t locked into a contract, you can find higher-paying loads in the short term. You have the ability to capitalize on peak periods or high-demand routes, boosting your income. Of course, this is usually only an option for owner-operators since company drivers tend to have less control over their rates. Company drivers earn an average of $0.72 per mile, while owner-operators earn as much as $2.94, so spot rates can make a huge difference in your earning potential.
• Short-term agreements: Spot rates are almost always for short-term contracts you negotiate on a per-shipment basis. Some drivers prefer the stability of contracts for that reason, but others like not being locked into a contract. Without a contract, you avoid fixed rates that could cut into your profits over time, giving you the flexibility to adjust your prices as the market changes.
• Diverse freight options: The freight spot market usually includes a broader variety of shipment types. Whether you want standard dry van loads or more specialized flatbed loads, you can expand your service offerings and tap into new markets. Since these are short-term agreements, you can dip your toe into these markets and see if they’re a fit.
• Less idle time: If you’re starting a trucking business with little to no funding, you can’t afford to take long breaks between hauls. If you’re in between contracts, accessing a spot market load board allows you to find available loads quickly. This approach minimizes idle time and uses your truck more efficiently, boosting profits.

What Is the Current Spot Market Rate?

Spot market rates change daily, so it’s hard to pin down an average, though as of July 2024, the yearly snapshot shows spot market rates were down 8.4% from June 2023 to June 2024 for spot load posts. However, reefer load-to-truck and van load-to-truck are up 28.2% and 34.9%, respectively.

Current spot market rates also differ by freight type. Right now, national van rates range from $1.79 to $2.17.

Ultimately, it’s best to regularly check spot market load boards for your region to see the most up-to-date spot rates. Checking frequently also positions you to take advantage of the best routes and rates.

Spot Rates vs. Contract Rates

As a carrier or owner-operator, you generally have to choose between two job types: short-term spot rates or longer-term contract rates.

With a contract rate, you negotiate fixed pricing for a more extended period. Most contracts last a few months to a year. They offer consistent pay rates, which could give you more financial predictability and stable work. However, contract rates tend to be lower because they don’t change with the market.

Spot rates, on the other hand, are one-time shipments that customers request on the spot market. Since these shipments are for one-time needs, they’re highly flexible and fluctuate based on supply and demand.

Some drivers like spot rates because they’re more flexible. You can choose loads based on your workload and current market conditions. You aren’t tied to a long-term agreement, allowing you to adapt your pricing (and earnings) to market conditions. However, spot rates carry more risk because they’re less predictable. If demand is low, you also risk earning less with spot rates than with contract jobs.

How to Use Spot Freight Rates to Get Higher-Paying Loads

Spot rates are riskier than contracts, but knowing how to leverage them could help you secure higher-paying loads. Follow these tips to find the best spot rates.

Check Current Spot Freight Rates

Is right now the best time to take on jobs with spot rates? Or should you look for a contract instead? Check current spot market rates and national average freight rates to identify trends. Resources like DAT will tell you whether spot rates will work in your favor right now or not.

Watch Spot Market Load Boards

Trucker load boards are great for finding spot freight jobs. Think of them as a matchmaking service that connects you with interested customers in your region. Shippers list their details, and you decide whether to take the job or not. Our favorite trucker load boards are DAT, DirectFreight, and 123Loadboard.

Work in a High-Demand Region

As a trucker, you can work just about anywhere. If spot rates are low in your area right now, see what they’re like in another region. Strategically positioning yourself in these areas will help you take advantage of higher trucking spot rates.

Optimize Routes

The more efficient you are, the better your earnings will be. Plan your spot freight routes to minimize empty miles. Identify the most profitable routes and avoid low-paying lanes if you can. That also means taking on high-value freight—and maybe even different types of cargo—to maximize your earnings.

Other Tips to Get Higher-Paying Freight Loads

Strategically choosing spot freight shipments will set you up for success, but there are a few other ways to score higher-paying freight loads, including:

• Offering fantastic service: It goes without saying that providing quality service is a smart way to retain customers and fetch a higher price for your services. Shippers will gladly pay more for timely deliveries, excellent communication, and damage-free delivery from a professional they trust.
• Specializing: Specialized freight services justify higher spot rates. Refrigerated goods, flatbed loads, and oversized cargo are just some of the ways you can specialize.
• Networking with clients: Spot market jobs are short-term, but that doesn’t mean clients never want to hear from you again. Most are happy to rehire high-quality drivers when they need one-time shipments again in the future—as long as the routes work out. Don’t overlook the power of cultivating relationships with high-quality clients. A few well-timed emails could give you access to jobs that aren’t even listed on load boards. Plus, established clients are more likely to be open to negotiating freight rates with you.
• Checking your data: This is an advanced tip, but a trucking tracking solution will give you data analytics to make informed decisions. With data in hand, you can make more informed decisions about which loads to accept and which will hurt your profits.

In-Summary: How to Take Advantage of Trucking Spot Rates

While trucking spot rates aren’t for everyone, they offer more flexibility and opportunities to increase your earnings. Follow the strategies in this guide to maximize your earnings with high-paying loads in in-demand regions.

Trucking Spot Rates FAQs

Where can I find spot rates?

Websites like DAT, Truckstop.com, and FreightWaves offer up-to-date spot freight rates and load availability.

What is the current national dry van spot rate?

As of July 23, 2024, the current national dry van spot rate is $2.08.

What is the current flatbed spot rate?

As of July 23, 2024, the current national flatbed spot rate is $2.51, which is lower than the average contract rate of $3.13.

What is the current reefer spot rate?

As of July 23, 2024, the current reefer spot rate is $2.47, which is slightly lower than the average contract rate of $2.79.

What factors influence trucking prices?

Several factors influence trucking prices, including:

• Supply and demand
• Time of year
• Weather
• Fuel costs
• The overall health of the economy
• Regulations
• Freight type
• Location
• Load-to-truck ratio