What are Algorithmically Defined Spot rates?

Traditionally, spot and contract designations depend on how users label their data. However, not all systems reliably flag this information. To improve consistency, IQ Benchmark uses an algorithm to classify rates based on usage patterns instead of relying solely on customer tagging.

This approach ensures a more reliable benchmark view, regardless of how data is labeled in your TMS.

How the algorithm works

The algorithm reviews the  linehaul rate  (excluding fuel) for each lane, defined as a  pair of five-digit ZIP codes  . It then classifies a rate as either spot or contract based on how frequently it's used:

  •  Spot Rate  : A rate is considered  spot  if it has been used on  fewer than 4 separate days  across all submitted data.

  •  Contract Rate  : A rate is classified as  contract  once it appears on  4 or more distinct days  .

 Note:  The count is based on  days  , not number of loads. Ten loads at the same rate on one day count as one instance.
The classification can  update over time  . If a rate begins as spot and continues to be used across more days, the system will automatically reclassify it as contract, and historical data will adjust accordingly.

What you’ll see in the dashboard

  •  Consistent, flat rates  over many weeks often indicate contract rates.

  •  Rates that vary frequently  , especially when involving a mix of carriers, typically appear as spot.

  •  Lane tables  in the dashboard can be used to identify low-performing lanes or spot lanes with high costs.

Strategic use cases

This algorithm supports more informed decision-making. For example, you can:

  • Identify  frequently used lanes  that are still operating on spot rates and explore opportunities to move them to contract agreements.

  • Understand where you might have  leverage with carriers  by offering repeating lane volume.

  • Detect  underperforming lanes  in your contract network.

Additional insight: Lane Consistency

In addition to rate classification, iQ Benchmark also measures  lane consistency  — how often a particular lane is used over a 12-month period, regardless of rate. This metric helps uncover high-volume lanes that may benefit from long-term contracts or deeper carrier relationships.