Identifying Data Issues in Freight Procurement Operations

Due to the digital transformation push that stemmed from the COVID-19 pandemic, more freight procurement teams are using data than ever before. However, while many companies are boosting their efficiency and performance as a result of the data revolutions they have undertaken, many are still struggling to make the best use of all of this new data that they have at their fingertips. The good news is that many of these issues generally have easily addressable root causes. With that in mind, here are a few of the biggest issues that freight procurement teams tend to run into when it comes to driving data success. Transparency Transparency is “public enemy #1” when it comes to the issues shippers face when trying to leverage data and glean insights. Freight procurement is one of the most dynamic parts of the entire supply chain, so it is imperative that shippers have a 360-degree data view of the freight procurement landscape. However, with brokers and other third-party partners offering scant insights it is impossible for shippers to make sophisticated and agile decisions when it comes to sourcing carriers. Therefore, before doing anything else in terms of data ops, shippers need to find a way to generate the most transparent insights possible. A first step might be to ask your carrier providers to share 100% data transparency. Internal Infrastructure Although many shippers are working hard to become data-savvy, a vast majority are trying to do so with outdated on-premise infrastructure. This approach can have a myriad of consequences, but arguably the biggest one is that it significantly limits their ability to collaborate and have easy access...

Navigating 2022’s Early Capacity Woes

Access to capacity has been an ongoing challenge for freight procurement professionals for the last 24 months. And due to the continued fallout from the 2021 supply chain crisis and the circumstances stemming from Russia’s invasion of Ukraine, any hopes that a more stable capacity market may appear in 2022 have quickly evaporated among the freight procurement industry. That said, there are still steps that freight procurement professionals can take to ensure they are navigating this historically frenetic and tight freight capacity market. Prioritizing “Real-Time” The freight capacity market is not only strained but incredibly unpredictable, with sudden periods of capacity appearing at random. This means shippers need round-the-clock visibility in order to capitalize on any opportunities to take advantage of excess capacity and value. And thus, they need to trade in outdated tools that provide only a fragmented and static market view for those that deliver dynamic, real-time insights on supply and demand which feeds directly into truckload pricing. Move Away from Brokers The shipper-broker relationship has been tenuous for a long-time as is. However, as unprecedented freight market conditions continue to rumble on this relationship is likely to get more fraught. Brokers are renowned for high prices and a lack of transparency – two things that shippers can ill afford at the current moment. And as shipper budgets and margins become more strained, shippers will need to find ways to optimize each and every dollar in their transportation budget. Innovative shippers have already turned to automation technology that leverages AI/machine learning to source compliant, asset-based carriers directly and circumvent costly brokers and the spot market. Reinforces the Need for Digital Transformation...

Energy Price Hikes & Freight Procurement

With news that gas prices have officially hit the highest national average since 2008, shippers and their freight procurement teams are focused on what this could mean for their operations-- and their transportation budgets. Already coping with a historic supply chain snarl-up, the energy price surge could hardly come at a worse time for freight procurement professionals. Here are a few reasons why. Budgets Strain Even Further Transportation and logistics-related costs can account for roughly 10% of total COGS depending on the industry. Any upward movement with energy cost eats into a shipper's profit margin. With budgets already stretched razor-thin, many shippers have been forced to optimize their freight procurement process to help mitigate rising freight procurement costs. Freight procurement automation technology has helped shippers circumvent the costly broker market and move goods on time, at fair market pricing. Capacity Issues Deepen Because of these rising costs, many carriers are having to be more discerning about which routes they run, and how often they run them, in order to maximize their fuel budgets. This means that available capacity is going to become both tighter and more erratic, and shippers are going to have to rethink their logistics plans in tandem so that they can navigate these circumstances. Consumers Feel Price Hikes One of the hidden but arguably most negative impacts of energy price hikes is what it will mean for shippers and their customer relationships. Given how stretched budgets are already, very few shippers can afford to simply “eat” their rising procurement costs, and thus, have to pass these costs on to consumers – which is obviously not ideal, especially now. In addition, because of...

Russia-Ukraine Crisis: Understanding the Logistics Fallout

Much like every business vertical, the Russia-Ukraine crisis is dominating conversations in logistics and freight procurement. A key cog in logistics operations, Ukraine represents 200 million tons of transit capacity. It's actually an important transit crossroad between Europe & Asia, which means any sort of disruption will have serious ramifications on not just the European supply chain, but the entire planet’s. With that in mind, here are some immediate supply chain and logistics challenges that are being posed by the developing crisis in Ukraine. Alternate Capacity Procurement Gets Even Worse Unfortunately, Ukraine is no stranger to having to adapt to logistical disruptions on the fly due to the conflicts that have unfolded in the eastern part of the country over the last eight years. However, as the country’s ports become more squeezed, more freight is rerouted to air and land, and additional capacity is needed to support battle efforts, the already strained capacity within the region is set to become more scarce and expensive. Material Costs Surge With the energy sector in particular one of the hardest-hit areas of the conflict, not only is moving freight going to become more challenging from a procurement perspective, but it is also going to be way more costly due to fuel price surges and shortages. Therefore, companies need to find ways to alter their strategies accordingly in order to make the most fuel-conscious decisions possible. Product Shortages Change Demand Imports into Ukraine are also set to have a huge impact on logistics operations as well. Because there is likely to be huge shortages of everything from food to clothing coming into Ukraine, shippers will have...