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...

Sleek Technologies Announces Michael Paul as VP of Sales

Pioneer in AI-driven freight procurement automation announces the addition of Schneider, RGL Logistics and Ascent veteran to its rapidly growing executive ranks CHICAGO, April 26, 2022 (GLOBE NEWSWIRE) -- Sleek Technologies, a technology data company, and leader in AI-driven freight procurement automation, today announced the hiring of Michael Paul as the Vice President of Sales. With over 30 years experience in supply chain sales and operations, Paul will lead the overall sales strategy which will support the growth of new SaaS customers, and expansion of the existing base. "We're extremely delighted to welcome Michael Paul to our executive leadership team," said Mike Nervick, CEO and Co-Founder of Sleek Technologies. "As a transportation insider, he brings extensive knowledge and experience working with shippers to understand their transportation challenges and needs. And with that, he will help us continue to disrupt the logistics space as shippers look to gain more control over their freight procurement operations." Paul’s hiring signals another important step in the expansion of the Sleek Technologies executive team and represents the fifth senior executive hire in the last two years. Prior to joining Sleek Technologies, Paul held pricing yield management, sales and account development positions – including stints at Schneider, RGL Logistics and Ascent. “Sleek Technologies is quickly becoming one of the most talked about freight procurement disruptors in the space today,” said Paul. “I’m incredibly enthused about joining a very talented team of innovators, and educating shippers across the country on how AI-powered technology, along with 100% data transparency, has automated one of the most critical supply chain processes - freight procurement.” About Sleek Technologies Sleek Technologies is the...

Game-Changing Tech Helps Shippers Manage Freight Market Fluctuation

In order to effectively manage transportation efforts, especially as the freight market bounces up and down, shippers need insights to understand and accurately predict demand for truckload carriers. No doubt, 1st-party data is "king" because it is specific to the user's activities. But when 1st-party data is not available, shippers turn to 3rd-party data. ISM Manufacturing PMI One of the 3rd-party data sources we like to reference is The Institute for Supply Management (ISM) Purchasing Managers Index (PMI), which is one of the most reliable economic health indicators available. Month-over-month, PMI measures changes in production levels, new orders, supplier deliveries, inventory, and employment. A PMI above 50 suggests growth or expansion in manufacturing, while a PMI below 50 represents a decline. If PMI is 50, there is an equal balance between manufacturing reports of expansion and decline. The March 2022 index was 57.1, which confirms manufacturing continues to expand. However, that’s a decrease month-over-month (Feb 58.6%). The 12-month average is 59.7, with May 2021 posting the highest month (61.6). Looking longer-term, PMI is expected to be 54 by the end of this quarter, according to Trading Economics global macro models, and closer to 52 in 2023. Truckload Demand & Pricing  As manufacturing activity levels out, so should the truck-to-load ratio and truckload pricing. Dry van load post volumes are getting close to 2018 levels, decreasing 13% week-over-week. While equipment posts increased by almost the same amount. Dry van load-to-truck ratio dropped 20% week-over-week from 4.3 to 3.41 (4% below 2018 LTR levels). These offer a solid indication that the load-to-truck ratio will continue to contract as we head into Summer. There...

Is The Reefer Supply Chain Starting To Balance Out?

2022 has already proven to be one of the most chaotic years yet for freight procurement and the refrigerated season was set to be the same way. However, while many believe that capacity access will once again be an issue, the reality is that there is currently a confluence of factors that may actually free up capacity in certain sectors. In fact, in the last 3 weeks, the reefer load-to-truck ratio has decreased from 12:1 to 8:1 year-over-year. And based on the USDA forecast the reefer supply chain will see improved balance in 2022, and that will impact rates in the spot market. With that in mind, below are several key forecast updates from the USDA that are likely set to drastically change the way that the reefer market looks in 2022. Citrus Forecast The most recent USDA Citrus April Forecast reduced all Florida grown oranges forecast by 3 million boxes – and comes on the heels of concerning news on bacteria spread among orange growers. At ~38 million boxes, this is a 28% decrease from 2021 and a whopping 43% decrease from 2020. To illustrate the gravity, this would be the lowest citrus production in over 50 years! Pork Forecast The most recent USDA 2022 Pork Production Forecast reduced pork production by 65 million pounds.  Exports are now expected to fall somewhere around 6.73 billion pounds, that’s a 4.3% decrease year-over-year. Higher carcass weight and increased disease risk contributed to lower slaughter numbers. Cattle & Beef Outlook In contrast to the negative news coming out of pork and citrus, the most recent USDA Cattle & Beef outlook increased beef production by 195 million pounds to 27.570 billion...

Are Shippers Ready For The Next Pivot? Most Are Not.

As Heraclitus once said, “The only constant in life is change.” That certainly rings true for transportation professionals looking to manage ambiguous freight markets. Truckload pricing continues to change, making it difficult for shippers to understand when they are paying fair market cost to ship goods. Load Volumes Declining Truckload.com reported a 9% decrease in total load postings week-over-week, the largest drop so far this year. Volume is down 29% year-over-year, but about 69% above the five-year average for the week. Load availability was slightly higher on the West Coast, but down in all other regions. Spot Rates Declining Many sectors continue to experience improved balance, which is evident in declining truckload prices. For example, dry van rates are down $0.50+ per mile year-over-year, and refer has fallen $0.90+ from December 2021. And because industrial orders fell, flatbed rates also fell slightly compared to January, but are still up 10% from this same period in 2021. One thing to note is this is the 1st decrease year-over-year since June 2020. Unfortunately, the decrease in flatbed rates will be short-lived as we head into summer, which will bring along disruptions due to US infrastructure initiatives, and road construction. Plus, as the US supply chain continues to clean up port congestion, there will be an influx of new industrial orders. Contract Rate Increasing Weakening spot market rates, along with skyrocketing fuel costs in March, overshadowed record-high prices for loads moving under contract. Contracted rates, on average, for dry van increased $0.19 to $3.28 per mile, eclipsing a previous record high set in February. On average, contracted reefer jumped $0.20 to $3.45 per...

Freight Procurement Tips for Refrigerated Season 2022

It is hard to believe that refrigerated trucking season is here. Rising temps, and fruits and veggies ready for harvest, typically bring the busiest time of year for reefer shippers across the US. And unfortunately, this year’s refrigerated season is set to be hectic as a result of massive supply chain disruptions stemming from Covid and the Russia-Ukraine supply chain crisis. Therefore, shippers need to rethink freight procurement by embracing new tools and analytics to successfully navigate this potentially historic (for all the wrong reasons) refrigerated trucking season. Here are a few things in particular that reefer shippers need to keep in mind as they execute their refrigerated trucking strategies. Capacity Situation Remains Fluid A lot has been made of the capacity crunch over the last 24 months. But recently it was announced that the load-to-truck ratio had dropped from 7:33:1 (in February 2022) down to 4:6:1. Spot rates were also on the decline with reefer spot pricing decreasing by ~$0.28 per mile. As the freight market continues to battle back to normal, it will be imperative that shippers have real-time, actionable freight data to quickly identify if/when they are over-paying to haul freight. Advanced freight procurement analytics empowers shippers with data to compare contracted carriers & brokers against true-market truckload cost (based on current supply & demand) so shippers can easily uncover resilience and cost reduction opportunities during this unpredictable time. Labor Shortage Continues to Undermine  OTD Despite efforts in both the public and private sectors to fill the talent pipeline, loading docks and trucking companies are still fighting to fill positions. And with that, shippers may continue to face delays in...

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...