Skip to content
BSG Carriers
800-799-3080Carrier LoginGet started
Spot vs contract

How freight rates actually work: spot, contract and rate per mile

The spot market pays more in a tight market and punishes you in a soft one. Contract freight does the opposite. Knowing which you are in decides what you should be taking.

Rate strategyOwner-operatorsNo sign-up

The difference, in practical terms

Spot freight is priced per load, at whatever the market will bear on the day. When capacity is tight it goes up fast, because a broker with freight and no truck will pay to solve the problem. When capacity is loose it falls just as fast, for the same reason in reverse.

Contract freight is priced ahead of time for a period, usually a year, between a shipper and a broker or carrier. It moves slowly. That is the entire point of it: the shipper is buying predictability in their cost, and the carrier is buying predictability in their revenue. Both give up some upside to get it.

For an owner-operator the distinction is rarely all-or-nothing. Most carriers run a mix, and the useful question is not which is better but what proportion suits the market you are in and the cushion you have.

When each one wins

The same load can be the right or the wrong decision depending on the month.

  • Spot wins when capacity is tight — after a weather event, during produce season in a growing region, or around a holiday pull.
  • Spot wins when you are flexible about where you end up and can chase a market.
  • Contract wins when rates are falling, because your price was set before they fell.
  • Contract wins when you have fixed costs that do not care about the market: a truck payment does not drop because the market softened.
  • Contract wins when you need to know where you will be on Friday.
  • Spot punishes a carrier who has to take something to cover a payment. That is the position to avoid, and it is a cash-flow problem more than a rate problem.

Judge every offer against your own number

Neither answer means anything without knowing what your truck costs to run. A rate is not high or low in the abstract — it is above or below your break-even, and that number is specific to your payment, your fuel economy, your insurance and how much you deadhead.

Work it out once and the decision gets much simpler. A contract lane at a modest rate that reliably clears your cost per mile with a margin is a good lane. A spot load at a headline rate that leaves you 400 miles from anything is often worse than it looks once the empty miles are carried by the loaded ones.

The calculator on this site does that arithmetic, including deadhead, and does not ask for an email.

What we do with this

01
Tell us about the truck
Equipment, home base, the lanes you like and the ones you will not run. We set up your carrier packet once and reuse it.
02
We find the freight
We track what a lane has actually been paying rather than what it paid last year, and tell you when the market has turned — in either direction.
03
We negotiate and book
We call the broker, push the rate, confirm the details and send you the rate confirmation. You approve every load before it is booked — there is no forced dispatch.
04
You drive, we chase the paperwork
Check calls, lumper receipts, detention claims and the invoice packet. You send the signed BOL; we handle the rest.

What it costs

Dispatching is charged as a percentage of the linehaul, agreed before you take your first load, and there is no long-term contract to sign. Ask a dispatcher for the current rate.

Our fee is a percentage of the linehaul, so a better rate for you is a better week for us. There is no version of this where cheap freight suits us.

Rate per mile: the number everyone quotes and few compute properly

Ask what a lane pays and you will be given a figure per mile. It is the universal unit of the industry and it is also the most commonly miscalculated number in it, because three different things get called by the same name.

The first question is whether the figure is linehaul or all-in. All-in already includes the fuel surcharge; linehaul does not, and a surcharge can be a substantial fraction of the total. Comparing someone’s all-in against your linehaul makes a bad load look competitive.

The second is which miles. A rate divided by loaded miles is not the same as one divided by every mile the truck turns, and the gap is your deadhead. Costs accrue on all of them; only the loaded ones earn, so the loaded miles have to carry the empty ones.

The third is what the figure is being compared against. A rate is not high or low in itself — it is above or below your break-even, and that is specific to your payment, your fuel economy, your insurance and how far you run empty. Two carriers can be offered the identical load and both be right to disagree about taking it.

Working it out, in the order that avoids the usual mistakes

01
Establish the rate type
Ask whether the quoted figure is all-in or linehaul plus fuel surcharge. If linehaul, ask what the surcharge works out at on this lane so you are comparing the same thing.
02
Count every mile
Loaded miles plus the deadhead to get there. The reposition is part of the job whether or not anyone pays for it.
03
Divide by LOADED miles
Total revenue over loaded miles. That is your effective rate, and it is lower than the headline whenever there is deadhead — which is nearly always.
04
Compare against your own cost per mile
Not against a national average, and not against what the lane paid last year. The calculator on this site does this with your figures and does not ask for an email.
05
Then judge the round trip
What is available out of the destination, and at what. A strong rate into a market you leave empty loses to a moderate one into a market that reloads.

What a rate index is, and what "rates today" actually means

DAT, Truckstop and similar services publish market rate data. It is useful and it is widely misread.

  • These indexes aggregate large numbers of real transactions and posted loads across a lane or a region, and report what that freight has been moving at. They are evidence, not a price list.
  • They are historical by nature. A figure described as current still describes what has already happened, and a market that turned this week will show up in the data after you have felt it.
  • A national average is close to useless for a specific load. Rates are set lane by lane, and the spread between a tight corridor and a soft one is far wider than any national figure suggests.
  • Check whether the figure includes fuel surcharge. Indexes report both, the difference is large, and the two get quoted interchangeably by people who should know better.
  • Most of these are paid subscriptions. If you are being shown a figure for free, it is worth asking where it came from and how old it is.
  • Used properly, an index tells you whether a broker’s offer is in the region of what the lane has been paying. That is genuinely valuable. It does not tell you whether the load is worth it to you.

Why this page publishes no rate

You will not find an average rate per mile anywhere on this site, for dry van or anything else, and that is deliberate rather than an oversight.

Any figure we printed would be wrong in three ways at once. It would be out of date within the week, because these markets move. It would be wrong for most of the trucks reading it, because a rate only means something against a specific cost base. And it would be unverifiable, because BSG is a dispatch service rather than a rate-data provider — we see what our carriers are offered, which is not a market index.

A number that looks authoritative and is none of those things is worse than no number, because somebody plans a month around it. What we can honestly give you is the method, the calculator, and a dispatcher who knows what a lane has been paying this week rather than last year.

Where to go next

Dry van loads and ratesThe most common trailer on the road, and the deepest freight pool.Refrigerated freight dispatchingTemperature-controlled freight, produce season and FSMA paperwork.Open-deck freight dispatchingSteel, lumber, machinery — and the securement that comes with them.Running power onlyYour tractor, their trailer. Drop and hook without buying a box.Box truck dispatchStraight trucks, final mile and freight that does not need a 53-footer.Dispatching a hotshot operationClass 3 to 5 with a gooseneck, running expedited and partial loads.Dedicated lanesThe practical way a single truck gets access to consistent, repeating freight.Equipment comparedDry van, reefer, flatbed, power only, box truck and hotshot, side by side.Work out your cost per mileWork out your break-even rate before you judge any load.Truck dispatch servicesEverything we handle, from finding the load to chasing the invoice.Dispatching a single truckHow we work for a single truck, and what you keep control of.Trucking terms explainedThe words used around a load, explained without jargon.BlogDeadhead, detention and finding loads — the business of running a truck.
FAQ

Questions carriers ask

Neither, consistently. Spot pays more in a tight market and less in a soft one; contract does the reverse. Most owner-operators are best served by a base of consistent freight that covers fixed costs, topped up with spot loads when the market is paying for them.

Put your truck to work

Send your MC and DOT numbers and a dispatcher will call you within one business day.