Moving shipment from one place to another is a complicated process which involves multiple stakeholders coordinating with each other. Inconsistent capacity availability, fragmented supplier base, price fluctuations, inefficient administrative processes, and lack of visibility can make freight procurement difficult and time-consuming. Do you know it can cost millions to a company in terms of lost sales if one of your shipments is delayed. Moreover, the cost of inefficiencies and price fluctuations adds on to the misery of logistics managers. Thus having a right freight procurement strategy is super-crucial to driving better OTIF deliveries at lower costs.
Traditionally, freight procurement has happened either through negotiated contracts with transporters or the spot market. While contracts provide capacity assurance and price guarantee to an extent, the spot market is effective when contract carriers are not enough or there is a special need to move freight on specific lanes for which the capacity or price was not negotiated in the contract.
Freight procurement is one of the initial stages of delivery to customers. Having a non-digitised, non-automated, fragmented freight procurement process can cause ripple effects to entire supply chain operations if not strategised properly.
Many logistics professionals still rely on spreadsheets to store transporter information, lookup and compare the rates based on previous data and procure vehicles. But why do professionals still over-rely on legacy spreadsheets? While there are elements of flexibility, familiarity and comfort to personalize and manipulate the data in spreadsheet, it falls short on many accounts:
Do you still think you can rely on spreadsheets to handle multi-million dollar freight procurement activities?
The data in excel needs to be constantly updated to tackle the problem of data loss. It is next to impossible to capture each and every data point in excel required to analyze the procurement strategy in real time.
Fragmented supplier base and smaller batch sizes can lead to higher number of time-consuming negotiations. Once transporters are shortlisted, these negotiations of finding the capacity at the right price is done via phone or WhatsApp for which multiple follow ups are required leading to delays. There is no guarantee that the selected transporter will have the available capacity and thus multiple rounds of coordination and negotiation may happen. And what if after all this hassle, contracted transporters denied placing the vehicle at the last minute?
There are many data points which are critical to make changes in procurement strategy which can significantly affect the bottom-line. But due to data loss because of outdated technology, there is limited availability of real-time data points to make an informed decision.
Thankfully, the freight procurement complexities stated above can now be tackled with digital indent management solutions which can automate the time-consuming tasks and help you optimize your supply chain.
Digital freight procurement solutions allow you to manage the entire vehicle sourcing process at one place. From indent creation, rate and capacity negotiation, indent allocation and vehicle placement process can all be done in a few clicks of a button.
The digital freight procurement solution uses a bidding system to give you the best prices for freight transport. The vendors compete by submitting successively lower-priced bids during a scheduled period, and you get the best rates possible. The contractual vendors can be brought on the platform to ensure best possible rates in minimal time.
Contracted carriers might not have the capacity needed to fulfill their contractual volumes. For most shippers, the spot market is unavoidable. The challenge for shippers becomes finding capacity at the right price in a timely manner. That is why automations can be combined with digital marketplaces to access a larger pool of transporters and suppliers to ensure timely freight procurement.
Freight Tiger’s indent management solution linked to the digital freight network with over 4000 verified transporters. This gives shippers a flexibility to publish requests for proposals to the larger network of carriers and get best possible prices in case of failure of contracted carriers to fulfill demand.
A digital freight procurement solution can serve as a single source of truth to identify best transporters by capturing crucial data points such as indent acceptance time, indent creation to vehicle reporting time, vehicle placement failure reasons, freight spend etc. All this can help shippers give visibility for fast data-driven decision making to adjust freight procurement strategy. It also increases transporters accountability which inturn can result in better services.
These are just some of the benefits of Freight Tiger’s Indent and Bidding Platform. It is a one stop automated freight procurement solution for shippers to improve OTIF deliveries at the lowest possible cost. Our solutions have helped multiple companies achieve cost efficiencies while optimizing their vehicle procurement process.
Read our case studies to know more about our solutions:
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Marketing Manager at Freight Tiger
Published on 05 Aug 2022
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