The significance of Freight Rate Index in strategic vehicle procurement

The dynamic industrial environment calls for strategic assessment and comparison to regulate freight cost control and management dynamics. Calculation of freight charges for each lane helps shippers understand the prevailing rates, stabilize their current freight spending and reduce them at set intervals. 

The competitive industry setups require practices beyond historical freight costs and freight bill reviews. Thus, freight benchmarking is influential in maximizing logistics profit with effective freight cost management.

The purpose of freight benchmarking

Freight benchmarking typically refers to comparing the freight charges incurred by an organization to the prevailing market rates for each shipment. The primary goal is to gain insights into the freight costs of other market players for strategic negotiations. 

Regardless of the number of shipments, the benchmarking practices empower businesses with optimum cost management and, therefore, help them yield operational cost savings. Today, leading enterprises recognize Freight Rate Index as a data-driven benchmarking tool across all industry verticals.

Freight Rate Index

A Freight Index is based on the current industry freight calculation data from all trading parties, including carriers, shippers and brokers. This data determines the benchmark rates for individual freight routes. It reflects informational consistency, data value, demand-based pricing, rate volatility and the scope of optimization. 

Besides, it enables transparency into the movement of the freight market and helps freighters identify the peaks and troughs.

The role of Freight Index in logistics 

The Freight Rate Index compiles real-time data to help businesses assess freight procurement costs and strategies and improve them per industry standards. The Index equips freighters to benchmark their freight costs with:

Freight Indexing Tool

Today, freight costs are an influential KPI in logistics dictating its profit metrics. In the era of digital adoption, SaaS TMS-driven Rate Index with shipping cost calculator catalyze freight procurement efficiency with data-driven decision-making, competitive freight rates, reduced transportation costs and budget compliances. It enables multi-facet competitive advantages, helping shippers leverage accurate data analytics and automation-driven comparisons, optimizing the overall logistics performance.