Make No Buts About it, Dynamic is Better Than Static!

Have you ever experienced a diagonal or horizontal crack in your home’s foundation? If so, you know leaving these cracks unattended will lead to bigger problems and costly repairs. If a shipper's freight procurement process is static and stymied by lack of capacity, then the shipper has cracks in its foundation too. Unfortunately, if left unattended, the shipper runs the risk of: High tender rejection rates Price gouging/ cost overages Poor OTD (on-time delivery) Lack of actionable data So what can a shipper do to repair cracks in the freight procurement process? Turn Static into Dynamic  The biggest crack develops when shippers are continually working within a static network made up of contracted carriers from the RFP process. In reality, even dynamic spot tools that claim to provide strategic enhancements recycle the same static network and ultimately reward primary and secondary carriers for rejecting a load, and then picking the same load back up at a more lucrative spot rate. Avoid Brokers & Increased Costs  Another foundational crack, that usually remains unchecked, is when a shipper accepts spot/broker prices as an everyday cost of doing business. Relying on brokers to haul freight is a tell-tale sign that the freight procurement process is not optimized! With brokers, shippers lose control not only on freight cost (can you say 30%+ increases) but on carrier visibility too (can you say 30-40% decrease in OTD). Leverage Smart Technology Break-through freight procurement software, called OTS, places control back in the shipper's hands by adding capacity without increasing cost, something that isn't seen using other technologies like DFBs. As a SaaS solution, OTS users configure when to open immediate access to...

To Contract or Not to Contract? That is the Question.

The freight market continues to carve out new records, and last week is no exception. Tender rejections remained above 25%, which is no surprise because it’s been there for months. And reefer is even higher at 50% rejection. All that said, the big surprise is that DAT reported contract rates ($2.76 per mile) higher than spot ($2.62 per mile). So what does this mean? With tender rejection rates at all-time highs, contracted carriers are passing on contracted freight to accept more lucrative business. And in some cases, contracted carriers who pass on contracted freight pick the same load back up in spot at a higher rate. This very practice negates all the hard work done upfront through the RFP process, and bears one key question… Why should shippers spend quality time and money locking in contracted rates when they may not be honored? Think about it, no other industry would allow for this practice. Once pricing is negotiated and agreed upon, the vendor is held to the pricing commitment or they are dropped as a strategic partner. Ask any shipper how long it takes to plan and execute a typical freight RFP-- months, not to mention costing millions in human capital and operational expenses each year. Large carriers are pushing for shippers to renegotiate contracted rates sooner than normal to level-set pricing, so they can take advantage of current market conditions and lock in higher rates. Unfortunately, for some shippers, freight rates will be locked in for a long period of time and not adjust as market conditions stabilize. To overcome this, some shippers are negotiating shorter-term RFPs, which help maintain pricing...

Freighting Meets AI (Artificial Intelligence)

generating a ton of headlines in verticals such as retail, healthcare, and consumer tech, it is also playing a huge role in reshaping transportation and logistics. As a result of the COVID-19 pandemic and fluctuating revenues, companies-- which have traditionally taken a more deliberate approach to adopt emerging technologies-- have been closely reassessing their technology infrastructure and embracing new tools to remain as competitive as possible. And AI is proving to be a core component of this technology “renaissance” and is having far-reaching impacts on several key areas of the freighting and logistics spaces including: #1: Data Optimization Business today is driven by data. That said, many companies still rely on antiquated technology and methods to make important decisions. Moreover, the data that they do have is often disorganized and siloed, rendering it difficult to make decisions quickly-- let alone comprehensive ones. AI and cloud computing allow businesses to bring multiple data sources together and use smart business logic to output actionable data that fuels strong, educated decisions. With centralized data, business units have evolving data from around the organization right at their fingertips. This allows for a much higher degree of agility and collaboration. #2: Eliminate Waste The supply chain is complex and involves multiple processes to successfully produce product and move it to its end destination. Freight procurement is one of those processes, which has proven difficult due to unprecedented freight market conditions. Contracted carrier rejection is sky-high, and freight brokers are fraught with high costs and transparency issues. For many decades, shippers relied on either contracted carriers or brokers to haul freight. AI now provides a new avenue--...