"Shippers and Beneficial Cargo Owners procuring transport directly with the Transport Carrier Network (TCN)"
Welcome to the first online procurement Freight Order Reverse Auction marketplace where shippers and beneficial cargo owners (BCOs) can procure current or future per-mile transport services directly from a national Transport Carrier Network of federally licensed, insured, and pre-qualified transport carriers to solicit and procure transport services at current transport COST or MARKET per-mile rates.
Freight Order Reverse Auctions can only be conducted by a shipper or beneficial cargo owner and are conducted to reduce spot market freight rate volatility and eliminate undisclosed Freight Broker fee markups nationally reaching .25 to .50 cents per mile.
Freight Order Reverse Auctions are conducted at the Transport Carrier Network website at local Shippernet Freight Center websites geographically located, at or nearby, over 1800 USA towns, cities, ports, and airports. Auction Freight Order transactions are cleared by an independent financial clearing house with fully disclosed auction and clearing fees paid by the transport carrier sellers.
In 1980 rate de-regulation occurred and transport carriers can now charge whatever freight rates are fair and reasonable. Reverse Auctions are conducted to determine fair and reasonable rates. To assist Buyer and Seller particpants in negotiating per-mile transport rates, a basket of currently weekly truckload transport per-mile cost along with published spot market Freight Future contract per-mile rates, adjusted for diesel fuel surcharges and average brokerage fee markups, are provided.
Weekly truckload transport per-mile costs are compiled by a staff of CPAs and Transport Costing Specialist based upon weekly diesel fuel costs and future transport cost inflation analysis of a basket of the remaining over-the-road line haul, fixed line haul, shop, administrative costs per mile based upon average annual miles driven. A comparison of adjusted published spot market freight future per-mile rates that do not include diesel fuel surcharges and national average brokerage fee markups is provided.
The Transport Carrier Network's pre-qualification and participation selection criteria assures shipper and BCOs of quality participant SELLERS of transport services in conducting a freight order reverse auction.   Each transport carrier must maintain an active listing at the network's National Transport Carrier Directory and maintain a direct link to the Federal Motor Carrier Safety Administration's database for active licensing, insurance, and safety information.
The staff of TCN looks forward to providing freight order BUYERS and SELLERS of transport services this new procurement service along with the weekly open and transparent cost and market data for participants in the procurement process.
A FREIGHT ORDER REVERSE AUCTION is a freight transport procurement auction where the auction parties are reversed.   A single BUYER or BUYER GROUP solicits current or future per-mile transport service directly from a Network of federally licensed transport carriers SELLER or SELLER GROUP.   Completed reverse auction transactions are billed, collected, and settled by an independent financial clearing house with fully disclosed auction and clearing fees paid by the transport carrier SELLER or SELLERS.
A FREIGHT ORDER issued by the BUYER is required to conduct an auction.   A Freight Order identifies the BUYER or Beneficial Cargo Owner (BCOs) of a load or shipment solicitation for the procurement of transport services.   A BOOKING serves as the basis for the CONTRACT for CARRIAGE subsequently issued by either the BUYER or SELLER at the auction's ending date.   Freight Brokers are not legal owners or beneficial cargo owners (BCOs) of a Freight Order and cannot partcipate in a FREIGHT ORDER REVERSE AUCTION.
STOPS, DROPS, ANY ACCESSORIAL CHARGES or other terms and conditions of transport are negotiated directly between the BUYER and SELLER.    Once a Contract for Carriage is reached, either verbally or in writing, the reverse auction is completed.
In a FREIGHT ORDER REVERSE AUCTION generally, but not always, the BUYER wants to procure and buy transport services at the lowest per mile freight price.   BUYERS most often want stable, transparent, fair and reasonable freight rates, and transport services. Conversely transport carrier SELLER or SELLERS want to sell transport services at their total and current transport costs that includes a fair and reasonable profit and return on their invested capital. A reverse auction provides transport solutions evaluated on both per mile price and other shipping factors.
Generally FREIGHT ORDER REVERSE AUCTIONS have COST OR MARKET per-mile thresholds.   BUYERS generally want to buy at the weekly inflation adjusted current cost of transport but many shippers and Beneficial Cargo owners want to buy at spot market rates using the SPOT MARKET LOAD BOARD to solicit both Network and Out-of-Network licensed transport carriers.
If the BUYER wants to procure transport services on the SPOT MARKET LOAD BOARD where the BUYER can solicit freight transport offers from both network and out-of-network transport carriers an auctioneer agent will conduct a freight order reverse auction for the BUYER and arrange for transport services at spot market rates. SPOT MARKET LOAD BOARD AUCTIONS are billed, collected, and settled by the independent financial clearing house in the same manner as if Freight Order Reverse Auction had been conducted by the shipper or beneficial freight owner directly.
A FREIGHT ORDER REVERSE AUCTION can start at any time and run for 2 to 10 days. All auctions are conducted by the shipper or beneficial freight owner and take place at the transport carrier network site. Follow the links below to learn more about freight order reverse auctions and signup for a username and password.
Whenever a Contract for Carriage has been completed, the contract is assigned to Carriernet Group Financial, Inc. (CNGF), the TCN financial clearing house, for receipt of Proof of Delivery (POD) documents. A Freight Bill is prepared and billed and collecting from the BUYER and settled with the transport carrier SELLER. All fully disclosed auction and clearing fees are paid for by the SELLER or SELLERS.
The financial clearing house makes available credit check information to the auction party participants. Final credit approval is the responsibility of the individual participants to the reverse auction.
Freight Order Reverse Auctions can only be conducted by one BUYER or a collaborating group of BUYERS that are the legal owners of the Freight Order.   Reverse Auctions are conducted directly between the BUYER and SELLERS of freight transport.  No Freight Brokers or "gross margin markup fees" are involved in a procurement auction for transport services.
Reverse Auctions are billed, collected and settled by an independent financial clearing house upon receipt of the Proof of Delivery documents (PODs) from the transport carrier SELLER or SELLERS.   Clearing and auction fees are fully disclosed upfront and paid by the SELLER or SELLERS.
Over 82% of Spot Market Load Boards are classified Ads are placed by Freight Brokers soliciting transport services.   Shippers or BCOs not trusting one broker may place the load or shipment with multiple brokers, similar to real estate multiple listings, creating chaos with multiple transport carriers SELLERS making multiple calls and e-mail where the load or shipment has already been booked. Rarely are per-mile prices advertised. Brokerage fee markups are never disclosed or are required by federal law.
Freight Brokers by federal law cannot own transport equipment and must solicit transport carriers by using free or subscription based Load Boards. It is a race to the finish line to negotiate per-mile rates, obtain a rate confirmation, an undisclosed markup to the shipper or BCO, and a signed BROKER/CARRIER agreement for transport. The difference between what the shipper agrees to pay and the cost of purchased transport cost is called "gross margin" after purchased transportation costs.
Billing, collecting, and settlements are performed by the Broker.   Upon obtaining a transport confirmation from the transport carrier an undisclosed commission markup is applied to the shipper or BCO freight bill. Upon receipt of the Proof of Delivery (PODs) documents from the transport carrier, a freight bill is rendered to the shipper or beneficial cargo owner, and a settlement is made to the transport carrier.   The difference is kept as a "gross margin" or "net brokerage" fee now reaching .25 to .50 cents per mile. Upfront disclosure of commission or gross margins earned is required by federal law. If asked, it is only disclosed after the transaction is completed. Rarely is it asked for and rarely is it provided to either party.
In summary a Freight Order Reverse Auction can be conducted by only one BUYER or a collaborating group of BUYERS, the legal owners of the load or shipment and are conducted directly between federally licensed SELLERS of freight transport with no undisclosed freight broker fees for arranging transport services.
Freight Order Reverse Auctions are billed, collected and settled by an independent financial clearing house upon receipt of the Proof of Delivery documents (PODs) from the transport carrier SELLER or SELLERS with clearing and auction fees fully disclosed upfront and paid by the SELLER or SELLERS.
While Spot Market Load Board classified ads start a type of reverse auction shippers and beneficial cargo owners are subjecting their freight rates and prices to spot market volatility that can involve high risk for rapid increases in freight rates resulting from a number of volatility factors such as diesel fuel spikes, driver availability, and wage increases.   An orderly Freight Order Reverse Auction eliminates the inefficiencies of multiple broker buyers and multiple transport carrier sellers for the same Freight Order for transport.