Using AI to Battle Rising Diesel Costs

There’s not much shippers and carriers can do when decisions or events on the other side of the globe impact the price of fuel. But just because fuel gets more expensive doesn’t mean business stops. According to the American Trucking Association, trucks moved around 72.5% of freight in the United States by weight in 2020. Since the majority of those trucks run on diesel fuel, seeing a major increase in the price of a gallon of diesel - like the one the U.S. is in the midst of right now – can have an immediate impact on profits. The average price for a gallon of diesel jumped up to $5.623 on May 9, according to the Department of Energy, marking a 46.3-cent leap over the last two weeks. As recently as Valentine’s Day, diesel was only $4.019 per gallon. A year ago, it was $3.186 – marking a rise of almost $2.50 per gallon over the last 12 months. Trucking companies generally apply a fuel surcharge to cover those inflated fuel prices, but those increases often get passed on to the customer. It’s hard to predict when the rise will stop – or even slow down – so it’s up to shippers to find other avenues to reduce costs. As diesel prices continue to rise, shippers are faced with the dilemma of charging their customers more or operating at reduced margins – unless they can find other ways to cut costs. Innovative shippers have embraced AI-driven tools for automation that have helped offset rising fuel costs. By using these tools, it can lower the overall cost of shipments, ensure that goods are...

AI in Freight Procurement Refresh

Technology is one of the hottest topics of conversation today in the freight procurement and logistics space, with AI, in particular, being one of the foremost areas of focus. Given how unstable and chaotic freight procurement has been over the last 24 months, shippers are desperately trying to adopt tools that turn static procedures dynamic and provide real-time insights and visibility to drive better performance, savings, and overall success. And AI-powered freight procurement automation software is proving to be a pivotal tool in helping to achieve these goals. Here are a few ways that AI is helping shippers break new ground in their freight procurement operations. Capacity Oversight Navigating capacity fluctuations has been one of the most challenging aspects of freight procurement over the last two years with the space experiencing a historic period of unpredictability. Shippers simply can no longer rely on outdated tools and the scant data provided by brokers to navigate an incredibly fluid capacity landscape. In turn, shippers have turned to AI as a way to gain a real-time look into the ebbs and flows of the capacity market instead of relying on partial or outdated data they were receiving from their legacy tools and partners. Price Management For years, brokers have been a thorn in the side of shippers for numerous reasons. However, arguably nothing has made this relationship more strained than issues of overpricing. The broker market is renowned for its heightened and opaque pricing structure. And with budgets tightening as a result of the COVID-19 pandemic, shippers have grown tired of this price gouging and thus have turned to AI as a way to dynamically...

Before Investing Millions in A Private Fleet, Give Freight Procurement Automation A Test Run. You’ll Be Glad You Did.

There seems to be a new costly trend amongst large shippers to deploy their own private fleets to help ease transportation bottlenecks. Sherman Williams just announced it would be using a private fleet of trucks and railcars to aid suppliers’ raw materials deliveries to boost production and inventory levels. But with a new fleet comes additional costs, added risk, and sometimes inefficiencies. Sherman Williams CEO, John Morikis, said “It’s a little less efficient than what we would like. We want to optimize our supply chain to its fullest. But when it comes down to it, we are going to choose serving our customers.” Walmart has continued to strengthen its own private fleets to not only support store delivery but inbound shipments from its suppliers. Last month, Walmart announced that it would increase pay for its 12,000 truck drivers between $95,000 to $110,000. They also launched a dedicated training program for distribution center employees to become certified Walmart drivers. As the largest retailer shipper, Walmart spends hundreds of millions of dollars a year on intermodal freight services using its own containers and chassis, along with a private fleet of drivers for pickup and delivery. That said, not all large shippers are in the same position as Walmart, therefore don’t have the same level of resources to launch such efforts. So instead of spending hundreds of millions of dollars on adding a private fleet, what else can a shipper do to avoid transportation bottlenecks? Innovative shippers have embraced AI-powered software to dynamically source compliant, asset-based capacity to always deliver goods on-time, and at a fair market cost. And the software seamlessly integrates with a shipper’s TMS for a...

How Has AI Automated Freight Procurement To Make Shippers Agile?

No doubt, digitalization is the future of supply chains across the world. It’s no secret that transportation and logistics are slow to advance, and mired in manual processes. And the pandemic certainly put a glowing spotlight on the need to revisit digital transformation within the supply chain. A recent survey by Bain & Company with the World Economic Forum stated that supply chain resilience and sustainability have become priorities for many large businesses. To proactively manage future supply chain disruption, shippers need to be agile and resilient. In other words, they need to be capable of pivoting– to follow what the market demands– on a second’s notice. Do you remember Sears, or what about Blockbuster Video? Both brands failed to adapt to market changes, and either missed or were slow to embrace innovative thinking. It’s unfortunate to think there are many large shippers who are still using archaic procedures within their supply chain. This is precisely why many shippers have struggled over the last 24 months to deliver goods on time, and at fair market price. Static, linear freight procurement procedures were never set up to effectively manage freight market fluctuation. The physical movement of goods is riddled with unknowns, such as natural disasters or shifts in consumer demand, and therefore requires smart tools to support resilience. AI-powered technology has helped many shippers turn static freight procurement processes into dynamic ones. Once the software is configured with the shipper’s unique load attributes and rules, the software goes to work by dynamically sourcing compliant, asset-based capacity whenever and wherever the shipper needs it. With no middlemen, carriers bid directly on loads, so shippers know...