The future of procurement is real-time. Historically, the procurement process has involved shippers securing quotes from carriers through the bidding process, with carriers putting forward rates and shippers choosing based on the best provider and price. However, whether bidding is done through RFPs or spot auctions, traditional methods leave money on the table.
Automated Procurement
In the six years since its inception, Uber Freight has demonstrated that automated, instant load procurement for transportation service providers and shippers is not only possible but, for many, the most efficient way to move loads quickly at optimized rates. When contract rates are locked in, shippers gain comfort in knowing what they will spend over the next 12 months. But when trucking rates plummet, as in today’s soft market, they risk overpaying.
On the other hand, siphoning loads into traditional spot channels results in a time-consuming back-and-forth negotiation and produces biased quotes. This strategy no longer serves as the optimal and most human capital-efficient alternative for matching volume with capacity. “Bidding is both time-consuming and very inefficient from a pricing technology standpoint,” Raj Subbiah, head of product at Uber Freight, said. “I believe, and I think the industry believes, that there are better ways for both the shippers and the carrier, which is upfront pricing, just like how Uber works.” Here are five considerations for shippers as they adopt real-time procurement solutions:
Based On Market Conditions
No bidding wars or tedious back-and-forth rate negotiations with carriers are necessary with automated load pricing. Uber Freight’s real-time pricing algorithm calculates quotes depending on market conditions like day of the week, time of day, weather and seasonality, instantly generating rates based on current factors and data.
Load Level Pricing
Shippers have levers to control their preferred starting price, ideal range and the maximum amount they’re willing to pay for each load, enabling greater flexibility over expenses while still at, or lower than, market price. Shippers have full visibility into transaction fees and know exactly what carriers are paid for each load. Also, once a load is booked, the price doesn’t change, so shippers know exactly what they’re spending when they book.
Priority Status
When expedited shipping unexpectedly becomes a necessity, shippers need a way to secure capacity fast. With real-time procurement, shippers control load priority, allowing them to quickly signal the urgency of a shipment to carriers and adjust the pricing accordingly.
Limit Carrier Participation
Whether a shipper requires truckload, less-than-truckload or flatbed capacity, Uber Freight furnishes the flexibility to meet each load’s unique requirements. Shippers can limit participation to a pool of desired carriers as well to continuously book with their preferred partners.
Real Time Quotes
Uber Freight developed its technology with shippers’ current ecosystems in mind, rather than trying to reinvent the wheel. “We spend a lot of time with shippers thinking things through the problem space from their vantage point,” Subbiah said. Through application programming interfaces, shippers can tender loads to Uber Freight in their routing guide or spot action module housed in their TMS. This allows them to embed real-time freight procurement tools into their normal workflows with ease.
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Source: Freightwaves
