(Graphics created by Emily Ricks)
Enterprise shippers are constantly faced with the challenges of procuring transportation. And change is the ever-lasting factor in transportation procurement. And even if all looks well, there’s an opportunity to correct and address fluctuations within the market by moving freight to the spot market. While that works when spot rates fall below contract transportation rates, there’s another side to consider, which is now available within SONAR SCI Lane Acuity.
Think about it. When shippers are overpaying or tendered loads aren’t accepted, which will vary by lane, it’s difficult to know where freight spend lies in comparison to others in the industry. After all, everyone is focused on keeping costs under control, maximizing use of assets and capacity, avoiding tender rejections and more. And now, it’s annual contract bidding season, and now’s the time to fix what went wrong with rates last year.
That’s where things get muddy. The disruptions of the past year have proven yet again that disruption and black swan events can come from nowhere, and it’s that fact that drives market volatility. Yet, knowing how stable the market is – its opposite of volatility – can play a huge role in deciding when to consider new mini-bids, when to rethink existing carrier contracts, and when to take other steps, like outsourcing transportation procurement as a whole.
There is an absolute need for informed decision-making and consideration of lane-level granularity. And that’s why Lane Acuity, leveraging lane-by-lane analysis at scale is redefining the standards for managing lane-level insight. It is also why shippers should apply that information to stay strategic and turn strategy into a tactical advantage in transportation procurement and day-to-day activities.
What is SONAR SCI Lane Acuity?
Lane Acuity takes the invaluable insights powered by SONAR and turns them into a customizable view of lane-level detail to empower users with more information about market stability, volatility and what it means for current rates.
Where do SONAR SCI Lane Acuity insights come from?
Lane Acuity insights come from a comprehensive and continually growing view of four years of data that incorporates $80 billion in paid invoices, 38 billion miles of transit, 75 million shipment and 2 trillion pounds of freight, all of which are still growing.
What does SONAR SCI reveal about freight rates?
This is perhaps the simplest fact about Lane Acuity. Rather than waiting to see how freight rates pan out over time, SONAR SCI makes an informed view of the ease-of-coverage as well as how well a given shipper’s current rating structure aligns with the market and peer groups.
When would enterprise shippers want to rebid lanes for short-term risk management?
Actionable insights from applied analytics optimize transportation procurement by understanding stability. However, it’s also easy to assume that some freight will inevitably end up in the spot market. That much is always true when capacity runs short. But normal market dynamics will come back into play and may send spot rates well above newly minted contract rates, wrote John Paul Hampstead via FreightWaves. That’s why it’s critical to never assume, even when underpaying in the spot market instead of moving freight across contracts, that contract rates are ideal.
How non-shipper parties could apply Lane Acuity
Although SONAR SCI is built for enterprise shippers that need same-day results, it has additional use cases for other freight management segments, including:
- Brokers derive savings from SONAR SCI in a fashion highly similar to that of shippers. Remember that brokers serve both sides of transportation management, acting as both a buyer and seller intermediary between the shippers and carriers. This distinction means brokers that can assess market conditions will have more information when contacting carriers to tender loads. By the same measure, they could use that information to help prioritize their own operations, including negotiating new contracts with carriers based on market dynamics. The same applies to negotiations with shippers depending on broker type, whether asset-lite, pure brokerage or wholly asset-based.
- Carriers have a slightly different use case for Lane Acuity. While not necessarily designed for or targeted at carriers, Lane Acuity helps carriers identify the overall dynamics within markets. Those with limited resources such as local and regional service providers (including owner-operators), may use SCI to quickly assess market volatility by lane and adjust rates accordingly. Remember that carriers want to maximize profitability per load, so areas with a higher volatility rating will come with a faster tender, a higher payday and essentially an easier time finding a load for available capacity.
- Analysts may perform a range of activities using SONAR SCI Lane Acuity, including reviewing documents and bidding information for carriers, brokers or shippers as a consultant, identifying trends within the market and more.
Overcome lane-level rate visibility challenges with SONAR SCI Lane Acuity
Regardless of segment or current status in the market, all freight management segments may benefit from lane-level analyses on day 1. While designed specifically with shippers in mind, SCI Lane Acuity promotes a level playing field by keeping everyone in the know and able to stay strategic. Remember that logistics is not simply a measure of the tortoise or the hare; it’s a measure of how well the tortoise and the hare work together to finally make it to the finish line and deliver on the promise of a better customer experience. Request a Lane Acuity demo to get started.