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  • Writer's pictureFreightFriend

What Are the Pros and Cons to Public Load Boards?

Public load boards can be a polarizing topic, depending on who you talk to. What makes them so loved or vilified? Let's define the term and look at some pros and cons to public load boards.


What is a load board?

Load boards are online marketplaces where carriers (trucking companies), freight brokers, 3PLs, and sometimes shippers post and search for loads. Brokers post lanes that have been assigned to them by their customers, and carriers post their current truckload capacity.


Each side is attempting to find matches in a short period of time, usually on the same day. Large volumes of posts are published daily, creating a plentiful supply, which can be useful and/or cumbersome for each party, depending on the situation.


How does a load board work?


There are now a large number of load boards online. Many large brokers and 3PLs have private load boards for their carrier network to browse. When it comes to public load boards, there are dozens of options, but the most common names in the industry are DAT and Truckstop.com.


In most cases, users are required to create an account and pay a subscription or per-transaction fee to use the load board. Carriers — especially owner-operators — post trucks soliciting freight. These owners include vital information about their equipment such as refrigeration capabilities, weight allowances, desired destinations, desired timing, rates, etc. Similarly, shippers and brokers post freight they need moved from an origin to a destination.


Like a dating app, load boards can spur a conversation between parties who think might be a match. Much like Craigslist, these marketplaces are a useful tool for consummating quick and easy transactions.

Let’s look at the pros and cons of public load boards more closely.



What are the advantages (pros) of public load boards?

There are many advantages of public load boards, including:

  1. Their ease of use,

  2. The ability to quickly find connections, and

  3. Their relatively low cost to participate.

For carriers in general, there is a huge opportunity cost to an empty truck. Booking a backhaul is a primary goal, and for larger carriers, they expect 80% or more of their active routes to be full. If a truck stays empty, time and money is lost.


Efficiency

Owner-operators, on the other hand, traditionally do not have regular lanes or long-term customers. As a result, they need a quick and easy solution for matching their equipment with a willing shipper. Therefore, load boards are very popular with these operators, creating thousands of hours of efficiency by facilitating real-time connections.


Low Barriers to Entry

The most popular marketplaces, Truckstop.com and DAT, are affordable solutions for these carriers. Due to the large amount of data being posted, a small trucking company can quickly ascertain average rates being paid for the lane(s) they seek to cover.


Data Available

Nearly 1 million loads and 1 million trucks are posted to these two websites every day. Based on this data, business owners can easily negotiate a rate based on real-time information.


What are the disadvantages (cons) of public load boards?

The downside of quick, easy, and fast, is that quality, privacy, and relationships suffer. For each benefit to public load boards, some component of the process is under-optimized.


Transactional, Not Relationship-Based

In general, a public listing website is not great for developing relationships. When was the last time you went to dinner with the person who bought your couch on Craigslist or OfferUp? It is highly transactional and not well suited for building long term connections.


Data Quality

In addition, the quality of data on public load boards is suspect. There is no referee or intervening authority policing the veracity of the posts. Oftentimes, carriers are fishing for rates without actually having capacity in the lanes listed. Similarly, some brokers post spot loads they don’t own yet to see if they can get a truck before accepting the freight.


Higher Costs

Moreover, the cost of doing business on the spot market is much higher than contracted freight. Aside from load board fees, shippers can incur other costs, including fees and commissions to brokers for posting freight on the load boards. There are also many intangible costs. For example, there is a higher risk when working with a non-network, unknown carrier. Onboarding costs, including labor, to set up a new carrier in the system also aren’t often considered.


Data Privacy

Finally, your data isn’t private​. For brokers, information about their freight and customers is shared publicly. The company and team members are subject to never-ending, unsolicited phone calls from carriers you don’t know and don’t want to know. Headaches can ensue when large numbers of hours are spent sifting between calls from customers you need to service and calls from carriers asking for business.


For carriers, information about their lanes and rates are shared. Anyone on the board can view your capacity, making it tough to maintain negotiating power.


Conclusion

For small brokers and SMB owner-operators, public load boards serve a compelling purpose. These companies do not have large budgets, have not developed significant relationships yet, and they are more concerned with short term revenue than the possible long-term implications of having their data shared and paying premiums for this service.


Public load boards can also be a necessity when you have spot freight and don’t have the bandwidth to get in covered quickly. However, as your company evolves and privacy, relationships, and service become larger factors in your decision-making process, you might want to become more selective about relying on public boards to move your freight.


Ultimately, the key is to view public load boards as part of the procurement mix, rather than rely on them for 80% of your freight.

 

FreightFriend addresses these issues for brokers and shippers who wish to find the right capacity for the right freight. Contact us today to learn more about our SaaS solution for truckload procurement.


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