Spot shipping explained

Spot shipping explained

By sennder team, 4 minute read

Moving some freight on the spot market is practically inevitable for shippers.

If you’re thinking, “Wait, what’s spot?” Don’t worry, you’re in the right place.

Welcome to sennder’s spot series, where we explain what you need to know about spot shipping and suggest some ways to save time and money when doing so.

If you already have a good understanding of what shop shipping is and when it is used, skip to the bottom of this page to find links to our other articles, which are focused on best practices within the business and how sennder helps companies get the best spot rates.

So what is spot shipping anyway?

A spot rate is a short-term pricing agreement for shipping one order, or a series of orders, within a narrow window of time. It’s typically defined as the price a carrier, or a third party logistics company (3PL), offers a shipper at a point in time to move their freight from A to B.

As opposed to standard shipping through contracted lanes, where the amount of freight moving and the price to move it have been agreed upon a year in advance, spot shipping tends to be a one-off transaction.

Generally, shippers prefer to ship through contracted lanes because the rates are set and are typically cheaper. That said, shipping at least some of one’s freight on spot is often necessary.

“Shipping on spot is typically for new business or unexpected business,” says Cody Trucco, senior program manager - spot strategy at sennder.

Smaller shippers may need to rely on spot rate shipping if they don’t handle enough volume to secure lane contracts. Larger shippers often rely on spot to fill in the gaps when contracts fall through or when unplanned or irregular shipments need to move. Furthermore, given the recent increase in pressure on supply chains, shippers are finding that they need to ship on spot more frequently to get loads delivered.

sennder’s advantage for spot shipping

Since spot rates are set based on the current supply of carrier trucks available and the demand, in terms of the number of loads that need to be shipped, they can function as a real-time reflection of the shipping market. However, spot rates are also affected by capacity liquidity, meaning rates are driven up or down depending on how many trucks are available to bid on a load.

As a large, trans-European 3PL, sennder has access to a vast fleet of tens of thousands of trucks spread across Europe. This means we can quickly connect spot loads with trucks that are ready to roll. It also allows us to offer highly competitive prices.

Check out our other spot articles to learn more:

5 tips for securing the best spot rate

How sennder makes spot shipping easy

Contact us to learn more about meeting your spot and shipping needs.