Guest Commentary: Transportation Sourcing Doesn’t Have to Be a Painful Process

As the economic recovery continues, several things are certain: fuel costs will eventually rise, truck capacity will tighten, trucking fleets will decline, driver availability will be constrained and pricing control will begin to shift away from shippers.

With base rate increases and fuel surcharge fluctuations on the horizon, best-in-class companies understand the need to become carrier friendly and establish strong carrier relationships to mitigate these future challenges.

Since the majority of transportation expenditures are typically incurred through long-term carrier contracts, strategically sourcing transportation services is fundamental to successfully managing supply chain costs. But conducting a freight procurement event has traditionally been a tedious and time-consuming process. Many companies waste valuable time and resources sorting through spreadsheets or complex databases and wading through different bid formats or faxed submissions.

Advancements in technology, particularly the emergence of software-as-a-service (SaaS) e-sourcing procurement platforms, are making transportation sourcing a less painful process. These applications enable companies to source carriers and other transportation providers quickly and easily, even without a transportation management system. They allow companies to solicit and optimize carrier bids, as well as award freight rates and capacity, in an automated, streamlined, and repeatable manner.

So, how can your company streamline its procurement process with technology? Here are 5 reasons to move away from “spreadsheets and fax machines” and utilize technology to manage the entire transportation procurement process:

  • Efficiency – Streamline and shorten procurement cycles using repeatable and automated processes.
  • Metrics – Measure the effectiveness of procurement events by evaluating the financial impact of proposed rate changes before business is awarded.
  • Scalability – Invite all or only a few of your carriers to bid and react faster to changing business conditions.
  • Consistency – Bids are received in a uniform format from carriers of all sizes and sophistication. Receive faster, more accurate responses.
  • Cost-effective – Reduce time and cost by sourcing quickly and easily as often as needed. Also, with SaaS-based technology, there is no software to purchase.

Furthermore, companies can evaluate scenarios side-by-side using embedded dashboards, reports and benchmarks to make better award decisions. The simplicity of using web-based applications allows for initial or subsequent RFPs in addition to periodic benchmarking. A SaaS procurement solution also enables companies to:

  • Quickly solicit and contract rates, capacity and lanes
  • Monitor event activity in real-time
  • Run procurement events by lane, region or network – as often as required
  • Benchmark rates prior to event and during evaluation
  • Observe how bids are progressing and trending
  • Receive faster, more accurate responses with a carrier-friendly web app

From seasonal volume profiles to equipment requirements to incumbent carriers to lane-based shipper targets, SaaS-based procurement applications consider key business factors for greater evaluation into market rates. The results not only consider transportation costs, but also include available carrier capacity, carrier risk, and carrier partnerships.

Simply put, SaaS procurement applications enable companies to structure and execute sourcing events online that deliver real, measurable results without the substantial commitment of time, resources and financial investment.

Chris Timmer is Chief Operations Officer at LeanLogistics. Chris is responsible for overall strategy, positioning and growth of the LeanLogistics solutions, including SaaS platform development and deployment and the expansion of the company’s service footprint internationally. Chris has over 20 years of experience in transportation and logistics management and he regularly speaks at industry events and has been recognized as a leader in the SaaS solution space.