reverse auction

On-demand quoting and reverse auctions are two useful tools for controlling shipping costs in the spot market. But shippers sometimes struggle with these scenarios because they’re used to working exclusively with contract carriers. If you find yourself fielding spot market quotes for a one-off shipment, consider using these tools to secure the best possible rate from a non-contract shipper.

How Does the Reverse Auction Work?

Reverse auctions involve fielding bids by carriers to get the lowest possible price. In a traditional auction, the highest bid wins; in a reverse auction, the lowest bid wins.

To facilitate a reverse auction, shippers share their shipment specifications—including dimensions, equipment type, and pickup and delivery data — and the highest rate they’re willing to pay. Carriers bid under this rate during a bid window, usually 30–60 minutes, with the winner subject to contract rights for that shipment.

Reverse auctions are most effective in busy backhaul lanes, where competition tends to be higher and there’s more rate fluctuation.

Benefit for Shippers

On-demand quoting and reverse auctions offer several benefits for shippers. The most significant is the “race to the bottom” in terms of rates. Reverse auctions almost always ensure the lowest rates for shippers because carriers can view other bids and adjust their strategy accordingly. In some cases, on-demand quoting can result in 12-25% lower shipping costs!

Another chief benefit for shippers is the flexibility on-demand quoting offers outside of contracts — especially for specialty shipments. Instead of paying exorbitant rates for LTL shipments through a contract carrier, it’s possible to field bids specific to that shipment and utilize the market as needed.

Advantages of  Using Online Tools

Modern reverse auction and on-demand quoting tools—like those offered by nVision Global’s IMPACT TMS — offer a slew of automated processes that make it easy to quickly tap into markets and field bids. Through pre-set criteria and established rules, it’s possible to recognize or eliminate bids automatically and to evaluate carriers without extensive manual input from shipping managers.

Cloud-based systems also offer the clear benefit of broad availability. Shipping managers and teams can access them from anywhere, on virtually any platform. And they provide a ready view of relevant data to drive informed decision-making when time is of the essence.

Should Shippers Go to the Spot Market Even When they have Contracts?

While contracts offer plenty of benefits to shippers, they’re not a catch-all for every shipping scenario. What happens when you need to transport a specialty load? How do you navigate freight in a new lane? Does your contract provide the best price for a regional LTL shipment? The spot market affords you lane and price flexibility and makes it easy to find and contract new carriers with capabilities outside your general needs.

Using the Spot Market Wisely

Most shippers will eventually need to rely on the spot market, and when the time comes, on-demand quoting and reverse auction tools are essential. Automation helps guarantee the best possible rates for shippers and takes the headache out of vetting bids in real time. With spot rates on the rise, these tools make it possible for shippers to continue moving freight without breaking the bank.

Automation makes reverse auction and on-demand quoting a significant cost-saving opportunity. With the ability to instantly appeal to reliable carriers at the lowest rate, shippers avoid the back-and-forth of single-carrier bartering. And success in the spot market gives you the leverage to address contracts in a proactive way. To learn how nVision Global can help, visit our website at