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Extreme Market Disruptions Force Shippers to Evaluate How They Secure TL Services

Extreme Market Disruptions Force Shippers to Evaluate How They Secure TL Services

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2020 has undoubtedly added disruption to the supply chain. Shippers across the US are scrambling to overcome the unexpected swing in truckload capacity and pricing. The traditional way of procuring freight transportation, through static annual contracts, is no longer best practice especially with market unknowns looming in the backdrop. “Shippers are struggling today. Contracted carriers are not meeting commitments because inked deals are no longer attractive,” said Mike Nervick, Sleek Technologies CEO. “The industry has seen an increase in carriers breaking contracts.” 

According to a recent joc.com article, titled Shippers Rethinking Annual Trucking Procurement Cycles, in order for shippers to avoid costly rate hikes in annual contracts, they must conduct multiple mini-bids throughout the year. The idea of updating freight pricing more frequently makes sense, but managing multiple bids, even little ones, is manual, tedious, and a ton of work. There has to be a better way. 

Well, guess what? There is. What if we told you there was a new software solution that feeds directly into a shipper’s TMS, where freight rates are dynamically set “on-the-fly” by the carrier? Rates are not locked into a static contract or devised by some margin-hungry middleman. Let’s say that again… rates are dynamically set “on-the-fly” by the carrier based on the availability of over a million owner operators, and current supply and demand! Total game-changer, right? Right. 

Here’s how the software, named OTS, works. When a shipper seeks capacity but wants to maintain cost control, they set the desired lane rate (we call this the shipper’s NBAp: Next Best Alternative pricing). The load is added into OTS where carriers have direct access to bid. If a bid strikes at, or below, the shipper’s NBAp (desired lane rate) the carrier is automatically awarded the load. No middleman is ever involved, which means no hidden margins driving up TL cost. With 100% transparency, OTS users always understand the true market {carrier} cost to haul a specific load, and can effectively benchmark when to go to market and how to bid in the future.

Usually, when a shipper seeks additional capacity, they pay more. “Excess capacity and savings have never gone hand-and-hand, until now,” said Michael Edwards, Sleek Technologies Enterprise Sales Leader. “Before finalizing 2021 plans, and renewing annual trucking contracts, shippers are evaluating our flagship software, OTS, to make their static procurement and tender process more dynamic and flexible.” 

To schedule a 15 minute OTS demo, click here

To learn more about OTS, click here