12 Trimble Transportation Bid Don’t Bet Determining how to price your lanes and the loads associated with them requires you to funnel in a lot of information, and ultimately distill all of those considerations into a single number. One basic consideration is that of supply and demand. As with any service, you must consider the capacity of supply and the demand for it. Rates will be sensitive to the relationship between the supply and demand of carrier capacity in any given area. This forms the basis of headhaul and backhaul areas, in which you can price higher and lower, respectively (since headhaul areas are generally industrial areas that produce more shipments, or demand, for lower capacity of carriers, or the supply). It’s good to pay attention to supply and demand that emerges in specific lanes - you may find that developing strong channels of multiple lanes between, say, two particular states may be very profitable because the demand for that lane is naturally very high. It’s also important to pay attention to the government’s role in the trucking economy, and in turn, your pricing. Policies issued by the Fed are designed to manipulate the cost and supply of money and can affect any industry - not just your own, but those you choose to do business with. So, it is wise to keep track of who these policies are most actively affecting, as a change to the money in their industry can easily affect your business as well. Additionally, it’s good to pay attention to Congress and its fiscal policy, as government taxing and spending can affect industries across the board, and thereby affect who you want to work with. Beyond considerations of an economic nature, pricing also needs to be looked at from an investment perspective. Most importantly, you need to consider risk/reward ratios, industry characteristics, diversification and returns. Figure Out Pricing Risk/Reward Ratios Industry Characteristics Diversification Returns Bid Don’t Bet