CTB Rate Negotiation & Pricing Strategies Flashcards

What is an accessorial charge in freight billing?

Answer: A fee for services beyond standard pickup and delivery

Accessorial charges cover extra services such as liftgate use, inside delivery, detention, or residential delivery that are not included in the base rate.

What does 'detention' mean in trucking and how does it affect broker pricing?

Answer: Time a driver waits beyond the free time at shipper or consignee, billed as an additional fee

Detention charges compensate carriers for driver time lost waiting to be loaded or unloaded, and brokers must account for these fees when quoting rates.

A shipper requests a rate quote for a lane with historically low carrier availability. What pricing strategy should a broker apply?

Answer: Price the lane at a premium to account for capacity risk

Lanes with low carrier availability carry capacity risk, so brokers should price at a premium to ensure coverage and protect margins.

What is the purpose of a rate confirmation in brokered freight transactions?

Answer: To document the agreed rate and terms between broker and carrier before the load moves

A rate confirmation is a binding document that details the agreed rate, pickup/delivery requirements, and terms between the broker and carrier prior to load execution.

Which type of pricing arrangement is typically used for high-volume, recurring shippers seeking budget predictability?

Answer: Contract pricing

Contract pricing establishes agreed rates for a set period, giving shippers cost predictability and carriers/brokers guaranteed volume.

What is 'backhaul' pricing and why does it often result in lower rates?

Answer: Discounted pricing for freight moving in a carrier's return direction after a primary delivery

Backhaul freight fills a carrier's empty return trip, so carriers accept lower rates since any revenue is better than running empty.