A new generation of online businesses wants to cut the transportation middleman out of the warehousing and distribution equation. This new online freight marketplace offers manufacturers and distributors greater convenience and efficiency by directly matching them with freight carriers, cutting down on red tape and lag time. But be cautious before taking the plunge with an online freight company.

How an online marketplace can work for you?

Online freight marketplaces allow manufacturers and distributors to:

  • Directly solicit shipping quotes online,
  • Incorporate real-time travel data, and
  • Anticipate delivery times.

They use satellite tracking and mobile technology, which provide direct access for carriers and shippers. In turn, these marketplaces eliminate inefficiencies associated with paper work orders, quote submissions and lengthy telephone calls to haggle over price.  

Post.Bid.Ship. has more than 2,000 trucks in its national network that are capable of various types of cargo transport, including partial loads, full loads and refrigerated loads. Shippers submit proposals. Then, prescreened carriers bid on jobs based on the specifications provided.

10-4 is another online freight marketplace that connects carriers to shippers using an automated transportation exchange. Carriers use 10-4 for free. Shippers don’t pay a monthly fee; instead, they pay 10-4 fees based on the contracts they obtain through the marketplace.

uShip uses auctions as their business model. Competitive bidding from providers allows manufacturers and distributors to pay a fraction of the retail rate for shipping services.

Avoiding potential pitfalls

Going it alone with an online freight marketplace is not for the inexperienced. You must know the exact specifications of your order before submitting a proposal online, because it may be difficult to adjust the terms afterwards.

You must also be familiar with daily fluctuations in shipping costs. Like any other commodity, transportation prices ebb and flow with supply and demand. Peak shipping months can quickly bust your freight budget, so it’s important to plan ahead.

Navigating the online freight marketplace – How do online marketplaces work?

Online freight providers bring added convenience and cost savings to the table, but different providers offer significantly different business models. So read all of the fine print before using an online intermediary for your shipping needs. A financial professional can help you evaluate your options and project how much you could save with an online freight company compared with a traditional brick-and-mortar company.

For more information about LBMC services, visit our Manufacturing and Distribution page.