Securing reliable and on-time trucks to pick up your organization’s freight is a difficult task as the market faces increasing challenges of dwindling transportation capacity and skyrocketing shipping costs. Freight carriers continue to bump up their rates and report capacity constraints across all modes of transportation.
The pressure on the supply and demand curve of capacity is expected to linger through 2023, so right now is a great time for procurement teams to ensure your organization and network can handle continued growth trends.
OMNIA Partners freight and logistics industry insider Conner Reed discusses how a group purchasing organization (GPO) can steer your procurement strategy toward opportunity in the midst of transportation issues.
"Freight and logistics is one of the most demanding yet unmanaged areas of spend for business. It's directly tied to revenue generation and customer service, but it's not truly understood by most procurement teams. However, when managed strategically with a GPO, you can really see a lot of improvement in accuracy, quality and savings." - Conner Reed
In part two of our three-part series, we take a closer look at some of the major freight market challenges right now- transportation capacity constraints and rising shipping costs- and what strategic steps you can take with your GPO toward solutions.
Curb Skyrocketing Costs By Locking in Your Supply Chain ASAP
Shipping rates are at all-time high. With no end in sight for peak surcharges from major carriers, experts reiterate the importance of locking in your supply chain, now.
TransImpact Executive Director of Parcel Solutions Jey Yokeley offers some key insight.
“Many shippers are learning that combining a cost-based approach with understanding the carrier’s operating ratios is the smartest way to negotiate,” says Jey Yokeley, Executive Director of Parcel Solutions at TransImpact. “These companies have figured out that entering a carrier negotiation with the help of a parcel consultant provides them with the knowledge to obtain the lowest rates possible with carriers who also provide steady, quality service. Now is the necessary time to use a consultant based on the current market environment.”
How do we keep cost controlled with much higher demand on limited networks? Partnering with a GPO provides you with options and advisors to take you in the direction of cost savings and solutions.
Position Your Organization as an Attractive Shipper
The tables have turned in the transportation marketplace giving carriers the upper hand. With the capacity limitations, carriers are now selecting shippers, and turning away new customers or removing shippers that make truck drivers wait at their docks.
Steps to Make Sure Your Freight Gets to Its Destination
How do you find space for your freight while everybody is looking at alternative ways of moving their goods? Incorporate these steps into your strategy:
1. Your company’s reputation starts at the dock. Make sure your freight is on-time, ready and packaged appropriately so you don’t hold up drivers. Shippers exhibiting bad habits that drive up costs are being dropped. Keep in mind that carriers have a long memory.
2. Make sure your data is in line. Digitalization and visibility are two key components to measuring performance, such as on time delivery, cost of lanes, claims, etc. Technology will help you drill down which carriers are best at certain lanes.
3. It's crucial for shippers to have a tool that allows for proper mode optimization as they manage both cost and service needs. Consider a Transportation Management System (TMS) with a 3PL service.
• Check out Loadshop™ from OMNIA Partners supplier, KBX Logistics. The freight matching platform seamlessly connects shippers and carriers to create opportunities with greater transparency and clarity in a volatile market.
Curb Freight Challenges With the Help of a GPO
The beauty of partnering with a GPO is that you're able to get your hands on solutions for freight capacity and cost challenges that are currently causing anxiety for many organizations. OMNIA Partners can connect you to cost-effective routes and industry-leading suppliers in the freight and logistics space.
Read the final installment of this series: Leverage Cost-Saving Technology for Freight Visibility & Optimization
Miss part one? Check it out here: GPO Drives Efficiency and Resilience in Freight and Logistics Challenges