Fixed Pricing for Road Transport

If you are a wholesaler, manufacturer, or retailer, as a new year commences this normally means as ‘shippers of goods’, you’ll start considering your freight prices and examining forecasts and trends from previous years. While in our last blog I considered managing last minute transport requirements, this one is to discuss the benefits of agreed fixed pricing.

Freight pricing has always been turbulent but nothing like we have seen in 2021, with the uncertainty caused from Brexit, driver shortages, fuel price fluctuations, the pandemic, inflation, and interest rates on the increase coupled with the rise in demand, all resulting in unprecedented increases in the overall cost of road freight.

The recent volatile nature of freight costs has recorded the highest prices ever for road transport, which has been widely publicised, and resulted in many manufacturers reporting widespread failures in contractual based commitments and increased spot pricing. With the expectation that road pricing will remain at high levels, businesses are being warned of further supply chain disruptions in 2022. The recently released TEG Road Transport Index illustrates this, commenting, ‘the continued increase of the average price-per-mile for haulage vehicles peaking at 30.3 points in December 2021’.

As a digital road freight business, it has however been encouraging that whilst our pricing follows the trend for spot pricing, we are able to demonstrate and provide freight solutions significantly under market pricing due to scale and the accessibility of the FLS supply chain, ultimately from engaging vehicles close to collection points, (regardless of origin) reducing costs and CO2 through reduced empty mileage.

Any company moving goods needs a dependable supply chain across each mode of transport and securing stable pricing for your lanes is a fundamental key to success, rather than working continually with volatile ‘spot market’ quotations. In 2021 we saw an increase in the shippers of goods looking for instant spot pricing, due to the inability of their road freight provider to supply vehicles or continue to deliver services at the contractual based commitments. So, when looking for fixed pricing, more so than ever it’s not only operational price commitments that is required but the ability of the logistics supplier to demonstrate understanding of market pricing, plan, anticipate and have the ability to deliver services, at the same price for the duration of the agreement.

Although historically you may find shippers willing to provide annual rate cards, based on the previous year pricing, now more than ever it is difficult to predict price in advance, and movers of goods will only acquire these rates and confidence from providers that can demonstrate a robust data driven approach.

FLS can support your future planning in pricing  

I believe the only way a logistics business can provide accurate transport pricing to the movers of goods, is by holding a wealth of data to understand market pricing and trends. To deliver volume requirements you need to combine this data driven approach with a scaled supply chain.

Data is the most important aspect of pricing at a rate that’s not only competitive but sustainable and at FLS we see this as the key factor when reviewing and proposing a regular pricing structure (rate card).

Using our Carrier Portal platform FLS evaluates our pricing data gained from 13,000 carriers, enabling not only instant live comparisons and competitive pricing but the identification of trends and geographical cost fluctuations allowing FLS to provide sustainable fixed pricing. Our Carrier Portal technology provides FLS with insight into not just overall network capacity to deliver, but price expectations against availability by vehicle type and location at a touch of a button.

While insight and availability are key to our delivery of pricing to our customers, these have also resulted in a significant increase in the number of vehicles available to FLS as many carriers are adopting FLS as their ‘go to source’, for securing loads whether for set locations, back loads, outbound loads, or full outsourced usage of their trucks.

Newly appointed Commercial and Legal Manager Zainab Latif, who will lead the provision of contractual commitments, states ‘FLS has been growing at a significant rate over the past 5 years but always understood the value of gathering and assessing data to create a fantastic tool to support shippers of goods to not only secure fixed pricing going into 2022, but also to have the vehicles and technology to provide constant delivery. Fixed pricing with FLS of course manages your costs but also removes the time and hassle of research into carriers, quality checking and managing a supply chain to ultimately deliver your requirements’

If you are a mover of goods and have a requirement for regular pricing commitments, for tender or benchmarking, please contact our commercial team.

Ieuan Rosser – CEO