Rate Management Systems - better manage freight rates, quotes, freight rates, spot and daily rates

by Johannes Wahllich

The terms rate management system or freight rate management system describe a class of IT systems or software that helps companies in the logistics industry to better understand and control the purchasing of their freight rates. Logistics service providers or freight forwarders use the applications to deposit their purchasing rates with carriers and airlines and make them available to their organizations and their own IT systems. But even more interesting: Freight rate management systems also help shippers and importers to manage their freight conditions from logistics service providers.

Rate management systems for air freight, sea freight, rail freight and land transport

In the freight market, the freight rates to be managed depend on the individual modes of transport. While in the air freight sector it is all about general cargo prices, a distinction is made in sea freight between general cargo prices (less-than-container-load or LCL) and container prices (full-container-load or FCL). The same applies to the rail freight. In the land transport sector, a distinction is made between piece goods (partial loads) and full loads, ie entire trucks.

Daily rates are also considered spot or adhoc freight offers

If freight costs or shipment costs are purchased on a daily basis from freight forwarders, this is known as adhoc prices. These are always absolute prices for a very specific shipment. These shipment prices may differ significantly from the freight costs of the long-term framework contracts, as there is, for example, available cargo capacity on ships or in aircraft to be filled. In return, correspondingly lower prices are offered by the freight forwarders. Even if companies use freight tariffs for their regular transport volumes, it makes sense for them to occasionally ask for prices from their freight forwarders. This helps you to save freight costs.

Freight rates are referred to as general offers or offers

Many shippers who regularly ship cargo conclude contracts or framework contracts with their forwarding partners for a certain period of time. The duration varies from one month to quarter, half year, year, up to several years. Multiannual framework agreements are often the result of a freight tender. At lower frequencies is sometimes spoken of freight tenders, but often more of rate updates or rate updates.

The freight rates are, to put it simply, kilogram or container prices for different services or quotes. These values ​​can then be used to calculate the absolute shipment costs. The shipper or freight payer will also be invoiced by the freight forwarder.

Freight purchasing and procurement with rate management systems

The use of manually maintained Excel lists is no longer up to date. It is difficult to standardize various bases of calculation and to convert amounts in foreign currencies only with great difficulty. In addition, Excel templates are time consuming in maintenance. Shippers and importers of all sizes are therefore beginning to seek technical assistance in collecting, comparing and managing their freight rates with freight rate management systems. When choosing an eProcurement system or a rate management system, however, companies must ensure that this covers both the freight rates and freight quotes as well as the area of ​​spot and daily price inquiries.

Standard web applications as a freight rate management system of great benefit to shippers

In addition to classic tendering tools and rate management systems, web applications, so-called cloud solutions, are a very good alternative for the freight sector. With these, tenders can easily be carried out. Shippers and importers can use this as a freight rate management system and also carry out normal rate updates and offer updates. The effort is minimal, regardless of whether the update takes place annually, quarterly or monthly. Once entered, data do not have to be entered a second time. In addition, shippers have the opportunity to obtain and archive spot prices from their shipping partners. This enables companies to manage their entire freight purchasing very efficiently. Another advantage of these rate management systems is that they are very easy to onboard and use and offer a very good cost-benefit ratio.

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