How Dynamic Rate Manager Simplifies Freight Rate Management

Dynamic freight rate management is possible with technology-driven dynamic workflows.

Dynamic Rate Manager is an expansion of the MercuryGate Smart Transportation suite, which includes capabilities for visibility, planning, and logistics management. Our customer rating model is intended to automate the calculation of customer rating while simultaneously simplifying freight rate management.

 At the center of this solution is the concept of using costs with markups to generate a customer rate, instead of traditional customer contracts. The end result is a simplified method to support consistent and accurate customer pricing even in multi-client, multi-execution models.

This article explores the features and benefits of Dynamic Rate Manager and how it streamlines customer pricing and freight rate management through simplification, adaptability and automation. Read on to see use cases for logistics service providers.

How Does Dynamic Rate Manager Work?

Dynamic Rate Manager works strictly off carrier cost by performing customer- or mode-specific uplifts against that cost, determined by customized rating profiles.

Rating profiles dictate how carrier costs are uplifted to generate customer rates based on client agreements, shipment characteristics, shipping lane, accessorials, and other parameters. Rating profile uplifts can be defined as a percentage, margin, or flat fee. They can be applied at a line haul level or by individual accessorials. This freight rate management model ensures consistent customer rates and protects margins.

The freight rate management power of Dynamic Rate Manager is that it works for both single execution loads with a single shipping order, as well as for complex multiple execution loads with shipping orders from multiple clients at varying rates.

To establish the cost of a specific customer shipping order in more complex scenarios, Dynamic Rate Manager utilizes a margin calculator to determine cost allocation for each order based on weight or a combination of distance and weight.
Once the allocation cost for each shipping order is established, we use a customer-specific rating profile to determine how those costs are marked up to generate the final customer rate.

Freight Rate Management: The Value of Dynamic Rate Manager

Dynamic Rate Manager delivers consistent and accurate customer rates. Freight rate management with this tool drives value for operational and administrative efficiency through simplification, adaptability, and automation.
With Dynamic Rate Manager there is no longer a need to manage separate carrier contracts against customer contracts in the TMS.
Instead, uplift pricing is managed in easily configurable rating profiles that can be applied to multiple clients. Since rating profiles are not associated to a specific contract, they can be used to generate customer rates regardless of where the carrier cost came from – contract, spot, or digital freight pricing. This simplifies freight rate management and ensures a seamless and consistent pricing process.
Using costs with uplifts to generate customer rates inherently incorporates changes in market conditions. This includes higher spot pricing in a capacity-restricted lane or lower spot prices when lane capacity is easily accessible.
Rate increases are automatically considered, since the system uses actual cost with a predetermined markup to establish the customer rate. This rating feature also supports enhanced models, such as multiple customer consolidations, regardless of external market conditions.
Dynamic Rate Manager supports automated quoting to enable self-service models that allow customers to quote and book online.

Visibility over margin and allocation of costs create a transparent process for customers from booking through invoice. If a carrier rate changes for any reason, customer rate recalculations are updated automatically with appropriate allocation and margin adjustmentsAdditional administrative lift not required.

Dynamic Freight Rate Management Use Cases

Oftentimes, the best way to explain the value of a dynamic solution is to discuss specific cases. Dynamic Rate Manager simplifies freight rate management administration and drives efficiencies for logistics service providers through numerous capabilities, including:
  • Contract Management – Traditional methods for associating customer contracts with carrier contracts are tedious. Dynamic Rate Manager reduces contract management administration by eliminating the need to create individual customer contracts.
  • Consolidation – Combining multiple LTL shipments from various clients into a single truckload can result in lower freight costs, but accurately managing consolidation rates can be complex. Dynamic Rate Manager creates the opportunity to uplift costs based on individual shipment dimensions to maintain fair and accurate cost allocation for every customer.
  • Customer Self-Service Quoting – DRM works to support quoting and direct booking by using carrier contract cost and user-specific rate profile uplifts to present accurate and reliable customer rates, instantly.
Dynamic Rate Manager adds value across your organization: simplified administration; adaptability to protect or increase revenue; and the automation of customer rates for quoting and booking.

To learn how Dynamic Rate Manager is changing the game for freight rate management, watch our Velocity 2022 webinar on-demand, “Using Dynamic Rate Manager to Support Multiple Customer Pricing Models.” You’ll see more in-depth use cases for pooling opportunities, billing accuracy, and API integrations to prepaid and add transportation services.

Learn more about how a Dynamic Rate Manager Supports Multiple Customer Pricing Models.


Leave a Reply

Your email address will not be published. Required fields are marked *