Much like in many business verticals, understanding supply and demand in logistics is pivotal to making sound, profitable decisions. Unfortunately, thanks to the data gaps and other hurdles that exist in the logistics space today, understanding supply and demand in freight procurement is incredibly tough to nail down. But this doesn’t have to be the case. Here are a few ways to crack the supply and demand code:
Prioritizing Supply and Demand
Shipping loads with no foresight into carrier capacity can result in huge financial waste for shippers. Wouldn’t it be great if shippers could optimize their shipping operations around when carrier capacity is high so shippers avoid paying higher fees? Unfortunately, most shippers need to ship products regularly because sales orders need to be fulfilled. Granted, having solid historical insight into how trucking costs shift throughout the year helps shippers forecast truckload costs, but unplanned disruptions can and will throw trucking cost trends out the window. So having real-time rate data that shows if and when trucking costs are shifting is most ideal.
Becoming Data-Centric
Logistics and freight procurement are two of the slowest moving categories when it comes to technology adoption. However, to overcome supply and demand hurdles, shippers need to find ways to leverage first-party data, along with carrier data, so that they can understand what the market looks like in terms of capacity. This means trading in outdated practices like Excel spreadsheets or relying solely on murky broker market data for dynamic data-driven solutions that can provide them with the insights they need to make better business decisions.
Knuckling Down on Brokers
The broker market is incredibly challenging to deal with from a transparency perspective on virtually every front — from fees charged to data insights. This leaves shippers and carriers with two options: use technology that leaves the broker market behind by going direct between themselves, or attempt to play hardball with brokers to get the supply and demand insights they need. While the latter option may result in some concessions, shippers and carriers need to think long and hard about how they can build the most sustainable operations, and that likely means finding ways to circumvent the broker market.