State of AI and Real-Time Data in Freight Procurement / Logistics
Worth an estimated $62 billion in 2020, and set to grow at a 40.2% CAGR from 2021 to 2028, the AI industry is exploding. And with so many innovations taking place from healthcare to finance, thanks to AI and real-time data, it isn’t surprising to see that manufacturers, retailers and distributors are looking into how they too can leverage AI and data to improve upon supply chain processes. Now, AI has been getting a huge amount of buzz recently for things such as autonomous vehicles and other futuristic types of tech. And while these might be exciting use cases, there are tangible real world examples where AI and data is already being deployed to drive better results for shippers, specifically during the critical freight procurement process. Here are a few:
In a world where customer relationships are more important than ever due to the constricting margins of the COVID-19 era, making sure on-time delivery (OTD) rates are as good as they can be is pivotal. Simply put, not only are shippers likely to be on the hook for chargebacks if delivery metrics are not met, but it can also result in unhappy customers that could look elsewhere for better performance. AI is helping shippers better manage OTD performance by providing greater forecasting abilities to avoid possible disruptions, along with real-time updates and communications about how a shipment is progressing.
Given how rapidly the freight procurement market evolves today, understanding the true market value of a load can be incredibly challenging -- especially if a broker is involved. However, new freight procurement software provides real-time freight rate data as carriers bid directly on loads; brokers have been eliminated from the process so there are never any hidden fees.
A static tender process is not only time intensive but can be very costly if a load gets rejected by contracted carriers and moves into broker/spot territory. As they say, the longer it takes to tender a load the more expensive it becomes! Instead, by leveraging freight procurement software powered by AI, shippers can easily access complaint, asset-based, out-of-network carriers who are ready and willing to accept loads.
With AI and real-time data, shippers can now access compliant capacity (blocked by brokers), and increase their tender acceptance rates savings massive amounts of time and money!