Truckload freight and transportation costs make up a large part of most logistical spending for shipping companies across the country. With surges in fuel costs and new fees, taxes and expenses levied on every load, budgeting needs only continue to increase. That’s even more true since transportation capacity, indicated by LMI.TPCP, is at 46.34, well below prior years’ averages in the above image. Yes, the need for shipping demand analytics is not new and was echoed in 2013 by Industry Week, “Relying on traditional supply chain execution systems is becoming increasingly more difficult, with a mix of global operating systems, pricing pressures and ever-increasing customer expectations. There are also recent economic impacts such as rising fuel costs, the global recession, supplier bases that have shrunk or moved off-shore, as well as increased competition from low-cost outsourcers. All of these challenges potentially create waste in your supply chain. That’s where data analytics comes in.”
Gaining in-depth insights and current data about the supply chain, load statuses, and consumer demands can make it easier for enterprise sippers to adjust and plan. Some things to consider regarding shipping demand management are critical to staying informed and expanding the network to meet demand constraints.
The problem: Shipping demand management includes a need to source capacity around the clock
Capacity rules when it comes to keeping the supply chain moving and the trucks full. The higher the capacity on every leg of the trip, the higher the profit margins. Sourcing capacity and load contracts require the constant attention of management. Thus, modern advances in data collection and analytics have made it significantly easier to automate this process.
- Data dashboards and mobile contract monitoring applications stay accessible 24/7/365.
- The access to real-time data makes it easy to check the validity and freight rates associated with one-off bids and load availability.
- Data-based innovations make it easier to secure capacity and maximize profits by staying strategic despite disruption.
- Connecting to consumers who need products and shippers that can get it to them faster will win the purchase.
Even still, it all depends on being able to keep an eye on what’s happening in the market.
Enterprise shippers want proactive freight rating processes and lower overall fees
Another big part of shipping demand management comes from being proactive and working with accurate data for profit and loss forecasting. Cost reduction strategies in supply chain management remain focused on getting loads from point A to point B as fast and as affordable as possible. And of course, customer satisfaction remains an absolute must, so speed, accuracy and cost remain critical aspects. Solid shipping demand management and cost control are about securing the most profitable loads. The faster and easier this gets done, and the better the contracts, the more profitable they get. Being proactive with trucking and shipping loads still exemplifies the best way to achieve these goals while also maintaining the competitive advantage. As such, seeing tendered rates in near-real-time data is a fantastic way to avoid overpaying when tendering loads.
In-depth insights afford more long-term pricing stability
Across the board today, the amount of the company budget that gets designated to shipping demand expenses can easily reach 50% or more. This cost must either be absorbed by the company or passed on to the customer through higher prices. Thankfully, there are several transportation strategies and simple steps available to management to help reduce costs. Reaching a point of long-term pricing stability remains the ultimate goal of enterprise shippers today. In-depth insights and long-term stability remain connected to carrier revenue in several ways, including:
- Reliance on data collection and analysis for an up to the minute picture of the supply chain health and status.
- Faster response time, since managers can use accurate data to make informed decisions.
- Optimal capacity acquisition and ideal shipping demand management protocols and fee reductions.
- Increased foresight into market volatility helps with short-term versus long-term contract management.
Supply chain visibility improvements with in-depth insights can have a ripple effect throughout a supply chain. Business innovation and management developments rank high on the list of what managers can do to respond to market volatility. Short-term and long-term contract acquisition and management remain a considerable part of shipping demand management. Resiliency and visibility have stayed necessary throughout the supply chain network. This remains especially true today now that market volatility has not faded in the slightest and will likely become more common as changes continue to occur.
Increase shipping demand management processes with freight data at your fingertips
The best shipping demand management and cost control come down to securing profitable loads day in and day out. Working from in-depth data insights allows for more informed decision-making regarding shipping management and load acquisition. Get started today with innovations that make market volatility easier to plan for and overcome with freight data experts’ help. Request a FreightWaves SONAR demo today by clicking the button below.