When a market or industry is disrupted, changes need to be made to help overcome the challenges that caused the disruption in the first place. Remember Blockbuster? They failed to overcome Netflix’s new disruption of DVD-by-mail and died over night. Same goes for the supply chain. Everything about the supply chain is evolving right now. And if a company is unable, or unwilling, to join the evolution there will be massive ramifications. So what can a company do to evolve?
A first step might be to review decade-old processes to see if there is a way to make the process more agile. Take, for example, the way shippers currently source truckload capacity. The process is static, and static is bad because it lacks flexibility and wastes precious time and money. Why? Most centralized transportation systems are purposely built to be static to follow configured rules related to a shipper’s unique transportation needs. Once the tender waterfall process begins, it’s not dynamic by default. It starts with the shipper setting a rate, and then works its way down the waterfall systematically until it finds a carrier who accepts the rate.
Unfortunately, shippers have experienced a massive uptick in tender rejections, so it is taking much longer, and costing more money, to find carriers. “The systematic process of tendering a load that by industry average will be rejected 30% of the time, and then tendering the load to another carrier that is rejected more than 70% of the time exhausts resources and increases cost,” said Mike Edwards, VP Sales. “If no acceptance is received, shippers are then forced into spot or with a costly, non-transparent broker.” After contracted carriers pass, shippers are forced to use brokers who block access to 60% of North America’s capacity made up of small carriers. And guess what, these small carriers are currently hauling for America’s largest shippers today, through a broker or DFB, whether the shipper knows it or not.
To survive in today’s market, shippers need to adapt quickly. With big market fluctuations, they need to be nimble to keep company goods moving on time and within budget. “Technology has played a huge part in shipper empowerment,” said Jaimie Kowalski, VP Marketing. “Technology makes it possible to change old processes, such as tendering freight, from static to dynamic.” New tender technology has made it possible for shippers to:
- Eliminate brokers and their hidden margins.
- Augment their current carrier network with additional capacity.
- Increase tender acceptance rates early on.
- Generate lower truckload cost.
- Level-set contracted carrier rates by understanding true market cost.
- Collect data to help make better-informed decisions.