Access to capacity has been an ongoing challenge for freight procurement professionals for the last 24 months. And due to the continued fallout from the 2021 supply chain crisis and the circumstances stemming from Russia’s invasion of Ukraine, any hopes that a more stable capacity market may appear in 2022 have quickly evaporated among the freight procurement industry. That said, there are still steps that freight procurement professionals can take to ensure they are navigating this historically frenetic and tight freight capacity market.
Prioritizing “Real-Time”
The freight capacity market is not only strained but incredibly unpredictable, with sudden periods of capacity appearing at random. This means shippers need round-the-clock visibility in order to capitalize on any opportunities to take advantage of excess capacity and value. And thus, they need to trade in outdated tools that provide only a fragmented and static market view for those that deliver dynamic, real-time insights on supply and demand which feeds directly into truckload pricing.
Move Away from Brokers
The shipper-broker relationship has been tenuous for a long-time as is. However, as unprecedented freight market conditions continue to rumble on this relationship is likely to get more fraught. Brokers are renowned for high prices and a lack of transparency – two things that shippers can ill afford at the current moment. And as shipper budgets and margins become more strained, shippers will need to find ways to optimize each and every dollar in their transportation budget. Innovative shippers have already turned to automation technology that leverages AI/machine learning to source compliant, asset-based carriers directly and circumvent costly brokers and the spot market.
Reinforces the Need for Digital Transformation
The freight procurement industry is renowned for its slow-moving approach to technology adoption. However, as the procurement process became disrupted by the COVID-19 pandemic, many realized they needed to become more agile and efficient in their procurement operations. Thus, many have begun to dip their toes into the “modern world” by adopting more sophisticated business intelligence processes and tools that help automate important supply chain processes. And this current crisis will only further underline just how important having a robust technology infrastructure is to achieving procurement success moving forward.