Have you ever experienced a diagonal or horizontal crack in your home’s foundation? If so, you know leaving these cracks unattended will lead to bigger problems and costly repairs. If a shipper’s freight procurement process is static and stymied by lack of capacity, then the shipper has cracks in its foundation too. Unfortunately, if left unattended, the shipper runs the risk of:
- High tender rejection rates
- Price gouging/ cost overages
- Poor OTD (on-time delivery)
- Lack of actionable data
So what can a shipper do to repair cracks in the freight procurement process?
Turn Static into Dynamic
The biggest crack develops when shippers are continually working within a static network made up of contracted carriers from the RFP process. In reality, even dynamic spot tools that claim to provide strategic enhancements recycle the same static network and ultimately reward primary and secondary carriers for rejecting a load, and then picking the same load back up at a more lucrative spot rate.
Avoid Brokers & Increased Costs
Another foundational crack, that usually remains unchecked, is when a shipper accepts spot/broker prices as an everyday cost of doing business. Relying on brokers to haul freight is a tell-tale sign that the freight procurement process is not optimized! With brokers, shippers lose control not only on freight cost (can you say 30%+ increases) but on carrier visibility too (can you say 30-40% decrease in OTD).
Leverage Smart Technology
Break-through freight procurement software, called OTS, places control back in the shipper’s hands by adding capacity without increasing cost, something that isn’t seen using other technologies like DFBs. As a SaaS solution, OTS users configure when to open immediate access to out-of-network, asset-based complaint carriers within their tender process. For example:
- OTS can start after contracted carriers reject loads to avoid brokers and increased costs.
- OTS can start at the same time as contracted carriers to level-set contracted rates.
To learn more about OTS, click here.
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