Rate Distance in OTM is the calculated distance between a shipment’s origin and destination. OTM needs this distance to cost TL shipments on per-mile rate contracts. There are two ways to provide this distance:

• Distance Lookup — your team pre-loads a table of distances lane by lane. OTM looks up the matching lane and reads the stored mileage. No external system is needed.
• External Distance Engine — OTM calls a third-party routing engine (such as PCMiler from ALK Technologies) at plan time to fetch the live calculated distance. This requires a license and API access to the external system.

The Rate Distance record is linked to the Rate Offering (carrier contract) — whichever approach you configure, you reference it in that field so OTM knows which distance method to use when costing shipments under that contract.