It’s hard to believe, but the midway point of 2021 has already arrived. And given how hectic the first half of the year has been for freight procurement and logistics pros, the second half of the year is likely to be just as busy and disruptive. With that in mind, let’s take a look ahead at the major stories that could define the second half of the year for freight procurement.
Summer Exacerbates Capacity Woes
Capacity has been an issue throughout the COVID-19 pandemic, and the fact that summer is approaching– a period when there are notorious capacity crunches even during “normal” times– isn’t going to help. Therefore, shippers will continue to see high tender rejection rates from contracted carriers. And to succeed, they’ll need an agile approach to supplementing their primary network and sourcing out-of-network capacity.
Brokers Fees Shoot Up
Compounding the capacity crisis that will likely take place over the next several months is the fact that broker fees are set to rise in tandem. Brokers are renowned for transparency issues and high fees, and they surely won’t miss an opportunity such as this to slap a hefty margin on top of already high procurement costs. Thus, shippers need to be even more wary of the broker market than usual and find ways to work directly with carriers to yield true market cost {fair truckload pricing} and above average OTD. Technology, powered by AI, helps shippers circumvent brokers to find the perfect carrier for every load.
Freight Procurement Looks to Tech
Accessorials, capacity planning, and tender management: these are just a few things that freight procurement professionals and shippers are tasked with managing every day. Unfortunately, given how “real-time” logistics is today, it is simply impossible to be as efficient as necessary without leveraging sophisticated tools such as AI, the cloud, and machine learning. Therefore, expect shippers to begin embracing technology tools to optimize freight management so they are better equipped to handle modern business demands.
For more information on this topic, read “Three Trends Shippers Can Expect Yet This Year” published on SupplyChainBrain (7/2/21)