Van/Reefer/Intermodal/LTL Contract Rate Per Mile Initial/Final (VCRPM1/RCRPM/IMCRPM1/LCWT1)

WHAT IS IT?

The average base rate (no fuel or accessorial charges) of mostly contracted freight volumes reported on a 14-day (Initial, 1) and varying period lags (Final, F) on a national level. They are segmented into van, reefer, intermodal, and Less-than-Truckload (LTL) modes. Van, reefer, and intermodal rates are expressed in a rate per mile, while LTL rates are expressed in a revenue per hundredweight (CWT) format. Contract rates within SONAR are calculated from invoice data from a large freight payments processor. 

Each mode has two tickers, one for the initial report, which has approximately 50% of the total volume and another final report which has more than 70%. The tickers are as follows:

  • Van initial (14-day) – VCRPM1.USA
  • Van final (56-day) – VCRPMF.USA
  • Reefer initial (14-day) – RCRPM1.USA
  • Reefer final (28-day) – RCRPMF.USA
  • Intermodal initial (14-day) – IMCRPM1.USA
  • Intermodal final (28-day) – IMCRPMF.USA
  • LTL initial (14-day) – LCWT1.USA
  • LTL final (42-day) – LCWTF.USA

WHO IS INTERESTED?

Analysts can use contract rate data to benchmark the freight market for longer term pricing trends. With a majority of freight moving under contract rates, analysts can use contract rate data to create improved models for truckload carriers and intermodal marketing companies who largely operate in the contract market.

Carriers can use contract rates to benchmark their rates against the broader market. With contract rates on a lane level available within Market Dashboard, carriers are able to benchmark their prices all the way down to the lane level.

Brokers can benchmark the rate that their customers are paying for freight movements. By benchmarking effectively, brokers can take contract rate data back to their customers when appropriate and ask for rate increases.

Shippers: Contract rate data allows for benchmarking of freight market spend, allowing for transportation budgets to be hit estimates more accurately when the market is changing. Additionally, when a shipper’s contract rate is higher than the national average, it allows for having discussions with brokers and carriers to try and find rate concessions. Conversely, if contract rates are below the national average, capacity disruptions could arise.

WHAT DOES IT TELL ME?

Contract rates measure the average rate negotiated between shipper and carriers on a national level. Contract rates dominate the freight market, especially with modes like intermodal, where an estimated 95% of freight moves under contracted agreements. SONAR subscribers are able to use the national contract rate data to benchmark themselves against the broader market and make the necessary adjustments.

Average contract rates show trends developing in long-term pricing agreements. Unlike the spot market, contracted agreements have a longer cycle and are typically negotiated on an annual basis. While the spot market tends to lead changes in the contracted realm, it can be difficult to see when and by how much these rates change in reaction to daily market fluctuations over time.

Search Knowledge Center

Related Topics

TRAC Forecast

Key Market Areas (KMAs)

Not Sure Where To Start?