Co-op blog with our partners @MercuryGate
As seasonality and disruption continue to redefine the capacity crisis, more companies turn to new technology, including digital freight matching, to streamline operations. Automation is rapidly becoming the cornerstone of technology-powered trucking capacity sourcing strategies. Shippers and l
ogistics service providers (LSPs) need to know a few things about how connected systems can help reduce truckload freight costs and secure capacity in a tight market.
The need to maintain control over freight management has never been more critical. Shippers and brokers need more certainty around cost control during times of disruption. In recent months, spot rates averaged 20-30% higher than in 2019. And market volatility continues. Thus, the only way to maintain productivity is to see and reduce all truck costs across all lanes and markets. Since carriers bid directly on loads, using dynamic rulesets to determine when to accept the bid, the process becomes autonomous and reduces costs.
2. Eliminating The Middleman Keeps Overhead In Check
Another aspect of technology-driven benefits comes from using systems that eliminate the middleman or broker from the equation. Remember that even larger brokers may work with other brokers to source capacity. As more people get involved, profitability per load declines. Also, letting the system do the heavy lifting of finding and sourcing capacity further eliminates hidden margins that add to total truckload costs. It’s a win-win for both the shipper and the customer.
3. Dynamic, Carrier-Set Pricing Ensures Competitive Pricing
In freight management, particularly sourcing trucking capacity, finding the best way forward means managing the balance of rates. But the rates for a single location and market are not necessarily indicative of rates in other sites. That’s where a dynamic, rules-engine adds value. The market pricing is set dynamically by the carrier. As a result, shippers simply select what rates they are willing to accept and in what order to accept such rates. Therefore, the lowest-cost bid is accepted. And it builds out a continuous improvement strategy that adds capacity at the lowest cost and most appropriate service level.
4. Transparent Rates Streamline Freight Management
Many companies are pursuing the advantages of technology-driven freight trucking capacity sourcing. And instead of running on the assumption that a carrier is offering the best rates, technology shines a light on what is and is not working the best. That creates a self-propagating process that adds value and streamlines freight management. Essentially, workers spend less time trying to find trucking capacity, allowing the process to run in the background. Applied across thousands of shipments, it creates a unique competitive advantage that offers up to 20% savings on trucking capacity costs.
Digitize Trucking Capacity Sourcing With The Right Strategy And Technology-Driven Process
Every modern supply chain understands the value of digital freight management. However, many still rely on emails and broad load boards that could lead to higher freight spend or rejected tenders. Instead of finding trucking capacity the old way, companies can move into the next generation with sequential waterfall bidding that gets the best rates without compromising quality and service. We’ll discuss how companies can use technology to source trucking capacity and lower costs and more at our in-depth webinar.