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Escaping the Hamster Wheel of Freight Sourcing in Volatile Markets

July 6, 2021

author:
Dylan Alperin

How to Unburden Yourself from Endless Tactical Sourcing

With the balance of power so heavily shifted towards carriers in today’s logistics markets, transportation procurement professionals more than ever find themselves caught up in seemingly endless tactical activities and unable to find enough time to drive strategic category changes. Carriers today are unwilling to hold rates for one year and are often asking for quarterly, monthly, or even more frequent changes. Competition today is often more about the buyer needing to secure reliable capacity than about seeking the best rate.

Dealing with this deluge of work to constantly update rates, renegotiate, and re-award is taking up all of your sourcing team’s time and resources. It’s not the best use of their resources, of course, but how to break the cycle? The concept of re-running an RFP that took months seems daunting and would be infeasible to some on anything but an annual cadence. 

Here are Two Ways to Escape and Get Ahead of the Game:

  1. Automate multi-round, rolling RFPs with Keelvar’s Sourcing Optimizer.

Our Sourcing Optimizer can be configured to automatically notify suppliers, open, close, and award rounds on a set schedule.

Here’s a use case example: Ocean carriers have requested monthly pricing and capacity updates, and the Category Manager needs to re-allocate among suppliers. 

  • Category Manager runs an RFP through Sourcing Optimizer and awards carriers.
  • In the same RFP, the Category Manager blocks non-awarded carriers and sets an additional round to open two weeks before the end of each month through autopilot (or manual configuration).
  • Category Manager can decide whether they allow the participating carriers to update only lanes they have been awarded in the past, certain subsets of lanes, or all lanes, using Keelvar’s lot visibility configuration.
  • Carriers update their bids with new pricing and capacity when the round automatically opens by Keelvar. The Category Manager can choose to include target pricing or feedback to bidders as an added feature.
  • Finally, the Category Manager, or autopilot, can refresh their award scenarios, run new scenarios, or leverage custom awards to reach ideal allocations. 

This will allow Category Managers to quickly and easily manage pricing updates and allocation changes while still managing their strategic supplier pool and reducing the RFP burden to a minimal amount.

  1. Keelvar’s Sourcing Automation Bots can go a step further to help take on workloads in spot bidding and sourcing new lanes by interfacing directly with requestors

This solution makes sure Category Managers still get the governance and control they are responsible for managing while empowering end-users to initiate and launch requests. Up to 90% of the tactical workload can be shifted to automation with this solution. 

A use case example: A Transportation Coordinator has a new Ocean Freight lane from Shanghai, CN to Atlanta, GA USA.

  • The Transportation Coordinator searches rate card (Fulfillment Optimizer) for pricing and sees none is available, this triggers the option of a new request with the Ocean Sourcing Bot.
  • Through a simple form, the Transportation Coordinator inputs lane details, equipment size, volumes.
  • Sourcing Bot sends the request along with its recommended supplier/carrier list to the Category Manager /Approver for review, updates, and approval. 
  • Once approved, the bot places the lane(s) out to bid, invites the right carriers, monitors the bid, validates data, and recommends an award based on lowest price or any non-price criteria.
  • The Category Manager approves or adjusts the awards and pricing is published to the digital rate card for Transportation Coordinators to continue using.
  • This prevents all the back and forth of emails/spreadsheets/calls to collect data and inquire about status, as well as the workload on the Transportation Coordinator or Category Manager to directly solicit rates, analyze scenarios, make awards, and update rate cards to a minimal amount.


    Summary

As recent global events have shown time and time again, disruptions can be short-lived or extended for longer periods and create major change to resource demands. Keeping goods moving is critical, and for transportation sourcing professionals dealing with supply chain chaos, Keelvar’s Sourcing Optimization and Intelligent Automation solutions are being used by Keelvar’s global clients to navigate the complex and volatile logistics markets, so that they can get back to strategically managing their categories. 


Talk to us today to learn how you can turn these solutions on for your team to save time, money, and headaches. 


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