Freight rates explained: what they're made of and what moves them

What are freight rates?

A freight rate is what a shipper pays to have goods moved, and, one step down the chain, what a carrier is paid to move them. In trucking it's quoted in a few common ways: a flat price per load, a rate per mile, or for less-than-truckload freight, a price per hundred pounds based on the shipment's class and weight. The same load can be described in all three, which is part of why rates are confusing.

Two prices often exist for one load. The shipper pays a rate to a broker, and the broker pays a lower rate to the carrier. Both are freight rates. When carriers talk about rates, they usually mean the carrier side: what the load pays the truck. When shippers talk about freight costs, they mean the total they pay, which may include the broker's margin, fuel and fees.

This guide covers how a rate is built, what moves it, and where the public rate data is. It's split into what matters if you ship freight and what matters if you haul it.

How a freight rate is built

Most truckload rates have the same three parts, whether they're listed separately or rolled into one all-in number. Tap each line on this EXAMPLE rate confirmation to see what it covers.

Notice the gap between the two per-mile numbers. The posting reads $2.83, but every mile the truck drives earns $2.57. Rates are quoted per loaded mile because that's what the shipper is paying for. Carriers pay for every mile.

How freight rates are determined

No single body sets trucking rates. They're negotiated, load by load on the spot market and for months at a time on contract freight. A handful of forces push them up or down.

• +Distance. Longer loads pay more in total but often less per mile, because the fixed time at each end is spread over more miles. Short loads often pay more per mile for the same reason.
• +Equipment. Reefers, flatbeds, step decks and specialized trailers usually pay more than dry vans, because the equipment costs more and fewer trucks can haul the freight.
• +Lane balance. A lane out of an area that ships more than it receives tends to pay more than the return trip. Carriers price the headhaul to cover the weaker backhaul.
• +Season. Produce seasons, holiday retail, quarter ends and weather all tighten capacity in some places at some times. Our freight seasonality calendar covers the usual peaks.
• +The wider market. When freight demand rises faster than truck capacity, spot rates climb; when capacity outruns demand, they fall. The load-to-truck ratio is one way the market is measured.
• +Urgency and difficulty. Same-day pickups, tight appointments, team service, hazmat and hard-to-reach locations all pay more. Expedited freight rates are the extreme end of this.
• +Fuel. Diesel prices feed into rates directly through fuel surcharges, and indirectly as carriers price their costs.

Spot rates and contract rates

Spot rates are prices for one load, set by supply and demand that day. They're what carriers see on load boards and what brokers quote for one-off shipments. They react fast: a storm, a holiday or a surge of imports can move them within days. Our guide to truckload spot rates goes deeper.

Contract rates are agreed for a period, often a year, between a shipper and a carrier or broker, for freight on set lanes. They move slowly and lag the spot market. When spot rates are well above contract rates, carriers are tempted to reject contract loads; when spot rates are below, contract freight is valuable. Many carriers run a mix of both.

How a broker prices a load

Most spot freight moves through brokers, so it helps to know how they arrive at the number on the posting. A broker usually starts with what the shipper will pay, then looks at what similar loads on the lane have paid carriers recently, and posts a carrier rate that leaves room for their margin. If the load is easy to cover, the first posted rate tends to stay low. If it's hard to cover, close to pickup or on a weak lane for trucks, the broker has to raise it.

That's why the same load can pay differently an hour apart. A posting made two days before pickup often starts low and rises as the date gets closer. A load that's still open on the morning of pickup usually has the most room. Carriers who know their floor and aren't desperate for that particular load are in the best position to wait for that room, or to ask for it.

Brokers also price in risk. A carrier they've worked with, who delivers on time and sends paperwork promptly, is worth more to them than an unknown truck, and some brokers will pay a little more to get one. That reputation takes time to build, and it's one of the quieter ways carriers earn better rates over time.

Where to find freight rate data

Public rate data is patchy but useful for direction. Load board companies publish national and regional averages for van, reefer and flatbed rates, often weekly. Freight rate tools sell lane-level history to carriers, brokers and shippers. Government sources, like the Bureau of Transportation Statistics and the Energy Information Administration's weekly diesel price, cover the wider freight economy and fuel.

Every figure comes with a basis you need to know before you compare: per mile or per load, linehaul only or all-in with fuel, spot or contract, and the period it covers. A national spot average says little about one lane on one day. When we cite market figures on this site, they come with their source, period and date. Our freight rate software guide explains what the paid tools show and what they don't.

If you ship freight

For a shipper, the rate you're quoted reflects the lane, the equipment, how much notice you give and how easy your freight is to handle. Shipments with flexible pickup windows, fast loading and clear appointment times are cheaper to move, because carriers waste less time on them. Freight that's hard to load, sits at the dock for hours or needs a special trailer costs more.

Compare quotes on the same basis: all-in with fuel, the same accessorial terms and the same service. A low linehaul with high detention charges can cost more than a higher all-in rate. For smaller shipments, LTL freight rates work very differently, using freight class and weight instead of miles. For full trailers, our guide to full truckload rates covers how truckload pricing works.

If you haul freight

For a carrier, the useful question isn't what the average rate is. It's whether a specific load pays your truck. That comes down to your own cost per mile: everything it costs to run your truck, divided by every mile you drive, loaded and empty. A load that pays at or above that number, plus your margin, on all its miles is worth taking. One that doesn't loses money however good it looks per loaded mile.

Work out your number with the trucking cost per mile calculator, then judge each load with the load profitability calculator, which subtracts fuel, wear, tolls and fixed costs and shows what the load really leaves you. Knowing the number is half of it. Getting it on the phone is the other half, and our guide on how to negotiate freight rates covers that.

National freight rates and why one number misleads

News stories often quote a single national freight rate, like an average spot rate per mile for dry vans. Those averages are useful for seeing which way the market is moving. They're not useful for pricing a load. A national average blends short and long hauls, strong and weak lanes, and busy and quiet regions. A carrier running a strong outbound lane can do well in a soft market, and one stuck on weak backhauls can struggle in a strong one.

Use national figures for context, your own lane history for expectations, and your cost per mile for decisions. When nothing posted near you clears your floor, the answer is usually a change of lane or timing, not a cheaper rate. Our page on what to do when you can't find loads works through that.