Who dictates how much to pay for something? The pricing question is more complicated than one may think. On the surface, the price tag is set by the service provider but it goes so much deeper than that. The price is not just a number that one party has decided to put on the label.
In competitive industries such as freight brokerage, pricing becomes more complex. It is akin to a chess game, one side can dominate the other, but the tides can change throughout the play. While many players can get involved in the final pricing, what seems to be a tug of war between carriers and shippers can cause ripple effects throughout the supply chain. Whatever role you plan in the value chain, knowing these dynamics can help you decide on your next step.
Among the variables that influence pricing are load volumes, contract rates, rejection rates, and economic policies and regulations. With more demand from carriers, shippers have pricing leverage, and they can negotiate lower costs. With more availability from shippers but lesser demand from carriers, carriers can set the pricing number towards their side.
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