This edition of #WithSONAR is a discussion that hosts Luke Falasca and Kyle Taylor held with Kyle Lintner, principal and managing director of K-Ratio, at the FreightWaves 3PL Summit.
FIRESIDE CHAT TOPIC: How a 3PL deals with a big difference between contract and spot rates
DETAILS: In a roaring, hot spot market like this, the gap between contract rates and spot rates can become enormous. The natural reaction is to reject the loads that are under contract, leading to the current high Outbound Tender Rejection Index. Kyle Lintner of K-Ratio talks about how a 3PL should get ready for when that situation arises and how data is an important part of that preparation..
SPEAKER and HOSTS: Kyle Lintner, principal and managing director of K-Ratio, interviewed by Kyle Taylor and Luke Falasca.
BIO: Kyle Lintner is the principal and managing director of Chicago-based K-Ratio. He founded the company in 2018. It offers such services as freight intelligence and pricing consulting. He is interviewed by the hosts of SONAR Live, Luke Falasca, an enterprise account executive at FreightWaves, and Kyle Taylor, manager of enterprise solutions at FreightWaves.
KEY QUOTES FROM LINTNER:
On the use of predictive analytics to forecast spot rates: “When I can see where there’s a time when I might be underwater, if the contract rates are no longer above spot, if you see the forecasted spot rate is above your contractual obligations, you need to get ahead of this. I either need to dedicate some more manpower to find additional capacity so that I’m not sourcing it at a higher rate, or maybe I negotiate with the shipper on that rate or possibly I need to abandon the lane.”
“How do you get ahead of it? You can go to the customer before there’s a problem and say, ‘This is the business you have with us and it doesn’t do either of us any good to keep the rate. Whether I fail on it or the next person fails on it, you’re going to rip through that routing guide and it’s going to end up spot. Let’s move this rate higher. It doesn’t do anybody any good to have that wasted productivity.’
“The reefer market is going to get ugly really fast. Tender rejections for dry vans and reefers should trend together. What we’ve seen since last fall is the separation between the two.”
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