With the proper use of data and freight analytics, contract procurement and securing capacity can be enhanced. The incredible insights that accurate data has to offer combats volatility and unearths a clear understanding of what’s actually happening in the market. Those are the founding principles behind SONAR SCI Lane Acuity. This is also the basis for what everyone seeks – data-driven information that helps solve disruptions in the supply chain, resulting in the best-informed decisions possible in regard to less-than-truckload (LTL) freight rates and tight truckload capacity.
Moreover, Supply & Demand Chain Executive explains, “Developing a point-of-departure strategy for partial and LTL shipments can give small and medium-size businesses delivery costs comparable to the mega shippers. Freight consolidation (commonly referred to as retail consolidation, or simply consolidation) is not a new concept. Stated simply, it is the process of combining freight from multiple shippers to build more efficient full truckloads. The result is improved efficiency and profitability for both carriers and shippers – along with significant environmental benefits.” And by knowing a few things about the risk of lacking data within RFP bidding strategies, it’s much easier to justify investment in a freight data system.
Lacking data promotes trouble in annual contract capacity procurement during times of volatility
During times of high freight market volatility in the supply chain, data-driven decisions and fact-based analytics must be seriously considered in order to mitigate unexpected occurrences to secure contract procurement. The lack of real-time data and intelligence through the shipment lifecycle can pose grave dangers for businesses during these times. The ramifications can yield long-term effects and without the ability to track data trends over time, contract procurement becomes extremely challenging and almost impossible to predict. Interpreting real-time data allows businesses to identify past trends and expose problems in short-term and even long-term increments; over the course of days, weeks, months and even years.
Using analytics will save time and help avoid problems securing LTL freight rates and capacities by pointing out opportunities. Traditionally, it was a common misconception for companies to interpret risk and automatically associate it with negative outcomes.
Now, the management of this risk provides ample opportunities to improve with tools that evaluate the market and compare it (in a detailed format) with the industry. By assessing the existing rate structure, organizations can see if they’re over- or under-paying in regard to tender rejections. As organizations aim for success by utilizing trackable data to make informed decisions, especially during times of market volatility, securing annual contract capacity procurement becomes highly achievable.
Increased data use and analytics enable short-term mini-bids and RFPs to secure FT, LTL freight rates’ alignment and more capacity
Data and analytics can provide enlightening insights that can greatly improve transportation management. This leads to the crucial steps of enabling short-term mini-bids and RFPs to specifically secure better FT and LTL freight rates. However, before reaching the negotiating table, someone needs to have bargaining power.
But how does one obtain bargaining power?
That is done through detailed insights and analytics that objectively show the current conditions of the freight market. Because the market will always fluctuate, it is absolutely necessary that short-term revisions to a contract or a new mini-bid are presented based on the current conditions in the market.
Detailed data allows managers to understand how volatility impacts rates and current freight spend, letting enterprise shippers know if those rates need to be adjusted. Using historical data and peer market insights allows for the optimization of a transportation strategy and strengthens bargaining power, giving the upper hand when it comes to negotiating and securing capacities. Together, it promotes continued route optimization and use of strategic transportation procurement practices.
Tips to using data to increase contract processes
It’s always beneficial to have a few tips to start contract negotiations. These include:
- Track market stability by understanding the load acceptance rates. Knowing the current status of the market leads to quality projections of freight rates and aids in making informed decisions.
- Increase visibility into current network density and carrier diversity. Seeing the long-term trends over time provides shippers with more options and a better understanding of density.
- Reduce confusion in benchmarking and tracking performance. Using a tested and accurate system that tracks historical occurrences over short and long periods of time enhances strategy and simplifies complexities.
- Increase ease of access in analytics reporting and systems. Integrating and streamlining such freight technology provides clear insight and promotes data-driven decision-making.
Reap the rewards of LTL freight rates and capacity sources with better data for contract negotiations
Trackable data and useful insights provide end-to-end benefits in the supply chain. By obtaining real-time knowledge of the market, utilizing that intelligence to improve contract negotiations results in legitimate decision-making. And by strengthening bargaining power with the use of what data and analytics have to offer, better freight rates present themselves, giving companies cost-effective solutions that will enhance their business. Learn more by requesting a FreightWaves SONAR and SONAR SCI Lane Acuity demo today.