According to Gartner’s “Future of Supply Chain Survey” in 2021, 60% of CSCOs are expected to make faster, more accurate, and consistent decisions in real-time. Shippers talk about transportation decisions being very critical to their business, yet they still use old, antiquated ways of transportation procurement that are cumbersome. They conduct annual events to onboard transport companies, manage LSPs on excel sheets, and coordinate and follow up with phone calls, SMS, emails and Whatsapp.

In this market, speed is crucial; else, the business is operating at a loss. They must make decisions quickly or risk increasing freight costs, inefficient service, and product unavailability.

So it all boils down to procurement!

What is transportation procurement process? How does it work?

The transportation procurement process involves all activities required for acquiring freight services from an external source, such as planning, purchasing, monitoring and reporting.

Shippers should prioritize optimizing and making the transportation procurement process more effective to help manage costs and build reliable LSP partnerships. Here are some benefits of adopting technology for transportation procurement process:

• Shippers can improve OTIF performance by improving fulfilment rates and time

By allowing the shippers to match their demand through their contracted LSPs or through spot bidding from an untapped capacity of over 4K+ pre-vetted transport companies.

• Shippers can reduce freight costs while increasing proactive governance and risk mitigation.

By gaining visibility into their LSPs performance like vehicle reporting TAT, fulfilment rate, standard transit time and vehicle acceptance TAT, shippers will be able to identify the most efficient LSP and build reliable partnerships to guarantee capacity availability.

• Shippers can be more agile and conduct more frequent bid events to assist in responding quickly to changes in the market

By inviting more LSPs to participate in these bid events so that shippers can identify and ensure partnerships with the right transport companies, possibly reduce rates.

• Access to the freight network to solve capacity issues with on-demand backup and spot capacity

By providing automated matching, these solutions offer responses in minutes, offering shippers real-time rates with guaranteed vehicle acceptance.To add, shippers can share the costs of the full trip with return load optimization.

• Shippers can utilize the same technology used to execute transportation to make informed decisions faster

By integrating with the TMS and ERP solutions, shippers can analyze and automate processes and reduce human errors. They get an overall view into the freight procurement process from the LSPs performance, freight costs and fulfilment.

• Shippers can improve their sustainability and reduce their carbon footprint

By optimizing return loads, Shippers can help reduce the environmental impact of transporting goods and eliminate the need for a second trip to collect the goods. Ultimately, it reduces empty miles, decreases congestion and speeds up total goods movement.

Learn how a leading beverage company was able to achieve 62% improvement in vehicle fulfilment TAT. Download Case Study.