If you are buying widgets, there are many ways to make your purchase, from going to a retail location, ordering online or using a standard procurement software tool that allows you to order lots of widgets and receive them over a specified period of time. However, if your role is managing the movement of widgets from point A to point B, or multiple points, the freight procurement task before you can be labor intensive and time consuming — unless you use a technology solution specifically designed for transportation sourcing.
Here are the top five reasons you need a transportation sourcing solution:
1. Freight is unique.
Freight sourcing is as unique and complex as the transportation industry itself. With multiple modes to consider, a wide range of potential providers with varying capacity and capabilities, and regulatory requirements regarding safety, equipment and other issues, just knowing which providers to ask to complete a Request for Proposal (RFP) can be a daunting task. Another challenge is that there are numerous rate structures in the market, varying by mode and provider, not to mention accessorial charges for items such as in-store delivery or fuel surcharges, which are implemented by individual carriers.
2. Cheaper isn’t always better.
While one carrier may offer an attractive rate for a specific lane, the provider may not have the capacity to service that lane on an on-going basis. Or, their safety rating may have recently been lowered. There are any number of reasons that would lead you to select a carrier at a different price point, including your specific service requirements or the provider’s past performance. A transportation procurement solution that is aware of carrier attributes and historical performance can provide a valuable decision support tool in shortlisting candidates.
3. Data rules.
Data is critical to decision making. Integrating with transportation management systems (TMS) will enable accurate definition of lanes and volume requirements. Additionally, you can evaluate and analyze carrier bids with simulation of actual shipment data, lanes and volumes to get a sense of overall cost and impact. When you have all of the information you need and the ability to create realistic models, transportation sourcing decisions become easier to make with confidence.
4. Relationships matter.
Transportation providers deliver products to your customers and are a reflection of your company and brand. A missed pick up or delayed shipment can have expensive and negative consequences, ranging from a manufacturing line sitting idle or a lost sale. That is why relationships matter. Even the best carriers may have a service failure on occasion; but the good ones call you first and help develop a solution that meets your needs.
Top-notch providers are in demand and receive numerous requests for bid proposals on a daily basis. You want yours to be at the top of the pile. If you can shorten the analysis time for carriers, they’re more likely to respond quickly and with a higher degree of detail to your bid request.
5. Less time on tactical work = more resources to devote to strategy and execution.
For all of the reasons listed above, freight procurement can be a challenge, filled with tactical, but time-consuming tasks like emailing and calling carriers or logistics partners and chasing data from multiple sources. You may do your best to forecast your lane volumes, maintain good relationships with your carriers and be prepared for capacity limitations, but you spend so much time managing the process that it can be difficult to just get the bid completed — or to spend the time you need to do complex analyses of the rate and service variables among your options. That is why you need a powerful transportation sourcing solution.
Say goodbye to stacks of spreadsheets and hundreds of emails from carriers and say hello to a streamlined, accelerated RFP process for freight procurement leveraging technology.
Debra Phillips, Director of Marketing for MercuryGate International, has worked in the transportation, logistics and supply chain industries for more than 20 years. She has held positions of responsibility with a global transportation services provider, a national industry trade association and a truck rental, leasing and dedicated logistics firm. A graduate of the University of West Georgia, she is a resident of Jacksonville, FL.