If Your Industry Changes, So Must You To Survive

When a market or industry is disrupted, changes need to be made to help overcome the challenges that caused the disruption in the first place. Remember Blockbuster? They failed to overcome Netflix's new disruption of DVD-by-mail and died over night. Same goes for the supply chain. Everything about the supply chain is evolving right now. And if a company is unable, or unwilling, to join the evolution there will be massive ramifications. So what can a company do to evolve? A first step might be to review decade-old processes to see if there is a way to make the process more agile. Take, for example, the way shippers currently source truckload capacity. The process is static, and static is bad because it lacks flexibility and wastes precious time and money. Why? Most centralized transportation systems are purposely built to be static to follow configured rules related to a shipper’s unique transportation needs. Once the tender waterfall process begins, it’s not dynamic by default. It starts with the shipper setting a rate, and then works its way down the waterfall systematically until it finds a carrier who accepts the rate. Unfortunately, shippers have experienced a massive uptick in tender rejections, so it is taking much longer, and costing more money, to find carriers. “The systematic process of tendering a load that by industry average will be rejected 30% of the time, and then tendering the load to another carrier that is rejected more than 70% of the time exhausts resources and increases cost,” said Mike Edwards, VP Sales. “If no acceptance is received, shippers are then forced into spot or with a...

Thanks, But No Thanks To Rising Prices Thanksgiving Week

As you’ve probably seen, tender volume and rejection rates climbed to new heights Thanksgiving week. Analysts recorded over 17,000 outbound tenders on the day before Thanksgiving. And post-Holiday generated over 12,700 tenders, which represents a whopping 49% increase year-over-year. “There’s a massive amount of volume out there, and reports show that online shopping is already up 22% from last year which means records will continue to be broken,” said Dean Corbolotti, Sleek Technologies VP of Managed Services. Beginning mid-November, the rejection rate climbed over 20%, and it has stayed there. Unfortunately, many shippers have been forced into the spot market to move freight. Unlike the beginning of 2020, average spot rates have been higher than expected and experts predict this will not change anytime soon. According to DAT, brokers have seized the opportunity to widen the spread between spot and contracted rates by $0.13 to a new national average high of $2.45 per mile. “Fear of the unknown drives shippers to seek brokers and pay any amount necessary to move the load,” said Corbolotti. “There’s no doubt that brokers are using this time to help recoup lower margins from the first half of the year”. And now for the kicker… what will happen to rates when the Covid vaccine rollout begins? “Shippers are already struggling to maintain routing guides with higher tender rejection, and transportation budget overruns with increased freight cost”, said Mike Nervick, Sleek Technologies CEO. “The rapid rollout of the vaccine will impact capacity and pricing, especially in the refrigerated market. To prepare, shippers must look to new technology that turns static processes dynamic, such as updating the...