The freight markets — and the economy as a whole — have changed at breakneck speeds over the past few years. In order to keep up with these often-volatile shifts, businesses across all sectors need transportation management teams prepared to navigate the dynamism of the market and proactively manage their own operations through dynamic data, processes, relationships and playbooks.
The current request-for-proposal process is outdated, insufficient and unreliable. Historically, shippers have executed RFPs on an annual basis, setting rates based on current market conditions and potential projections. Throughout the year — as the market moves away from those projections — carriers and shippers alike are quick to abandon previously awarded rates.
This trend keeps shippers and carriers locked into transactional, misaligned relationships driven by spur-of-the-moment rate swifts. Freight is a commoditized market, and these dynamics mean that locked-in rates only put more stress on routing guides and the team responsible for driving that compliance. Therefore, dynamism should be considered in rate management as well
It is high time to rethink these dynamics, shifting the focus from transactional to transformative. When shippers and carriers alike focus on building strategic partnerships, both parties can leverage those relationships to excel in any market.
Dynamic transportation management teams are composed of informed, innovative and intentional members. These teams focus on data-informed decision-making, using high-quality knowledge to drive strategic operational shifts.
A strong commitment to collaboration and innovation lies at the heart of this new approach. Shippers and carriers must work together to identify individual and shared pain points, then develop solutions that address the needs of both parties. In order for this to be successful, the third-party technology partners that work with them must also be willing to invest in solutions that integrate with existing systems and provide actionable insights into important metrics like transportation spend and carrier performance.
For shippers, building more dynamic relationships with their partners starts with understanding transportation spend and tracking carrier performance. Trying to make positive changes without the evidence to back up lived experience is often met with resistance. Utilizing data ensures everyone is on the same page.
When logistics professionals have access to real-time, high-frequency data, all parties are able to make more informed decisions on rates, capacity and performance. These insights give logistics professionals the opportunity to find — and keep — the best partners without having to navigate opaque RFP processes.
With high-quality, data-driven metrics — paired with an open mind and an eye for innovation — it’s possible to create dynamic transportation management strategies. Shippers’ constant dedication to collaborating with partners and embracing new solutions will drive the market transparency necessary to stay ahead of the curve.
Systematic change can be difficult — and sometimes slow — to enact, but it’s clear companies across the industry can no longer afford to rely on antiquated RFP processes and transactional relationships. All players must work together to incorporate more dynamism in transformation management in order to move away from these dead-end partnerships and keep up with the pace of change in today’s global economy.
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