How To Tackle Logistics Sourcing Challenges With Tech


August 26, 2022

Logistics sourcing is known for its complexity, and today sourcing freight has become more complex than ever. Companies that produce, move, and sell goods have all felt the sting of decreased flight numbers coupled with increased costs for ocean freight and other avenues of transport.

The unprecedented disruption caused by the coronavirus pandemic, compounded by the Suez Canal blockage, and further exacerbated by the Russia-Ukraine conflict has removed any semblance of what we once believed to be ‘normal’ business activities in procurement and logistics sourcing.

What Are The Challenges Facing Logistics Sourcing?

Here are just a handful of the realities impacting supply and distribution today: 

• Uncollected cargo and port congestion 

• Reduced workforces or port and warehouse closures 

• Suspended services and fewer access points to ocean trade 

• Stranded crew and other transportation workforce shortages 

• Drops in air cargo capacity due to fewer passenger flights 

• Unforecasted swings in demand for certain types of goods 

• Skyrocketing air freight and tanker rates 

• Distribution challenges for perishable goods 

• Massive increases in small parcel delivery due to more online shopping

• Spiking oil prices and soaring fuel costs 

This is only the tip of the iceberg bearing down on sourcing functions trying to keep their businesses afloat while cargo movements are at a standstill and budget management has become a struggle to orders of a magnitude never experienced in the industry before. 

With regular transport sourcing tactics interrupted and limited, business operations are being forced to adapt rapidly. Spot market buying of logistics capacity across all modes of transportation for many has surged in the number of requests that need to be responded to and tracked more efficiently and with best practice.

The Role of Modern Technology In Logistics Sourcing

As logistics teams and transportation sourcing personnel become overwhelmed by their increasing workloads, what they need most is not more data – they need actioned intelligence where the software solution reduces the load and performs the work that would otherwise fall on their shoulders.

As a result, many leading procurement teams are turning to automation and artificial intelligence to combat the turbulence. Specifically, within logistics sourcing, sourcing optimization and sourcing automation solutions can play a helpful role in aiding buyers to be more responsive and agile in the evermore frequent spot buying process. 

Leading sourcing teams are turning to optimization and AI-powered automation to navigate markets that are changing faster than ever before. What many have discovered in the process is that it’s not only highly strategic or annual RFPs that can derive significant benefits from harnessing such technology. 

What Are The Benefits of Optimization Technology in Logistics Sourcing?

In today’s market, shippers no longer have the upper hand. Once upon a time, it was down to carriers competing for business, and now that role has reversed. Carriers 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. With the balance of power so heavily shifted towards carriers in logistics markets, transportation procurement professionals are finding themselves caught up in these seemingly endless tactical activities and unable to find enough time to drive strategic sourcing category changes. 

Dealing with this deluge of work to constantly update rates, renegotiate, and re-award is taking up your sourcing team’s time and resources. But with the help of powerful, optimization-backed sourcing solutions, you can:

-Reduce risks across your logistics sourcing needs using intuitive sourcing technology

-Rapidly respond to market changes based on specific business requirements to make the best possible decisions that balance cost, service, and goals. 

-Bring advanced features not supported by a Transportation Management System (TMS) or general eSourcing tools to the full spectrum of transport events.

-Simplify complex, data-laden sourcing processes that speed event set up and improve competitive bidding. 

-Increase speed and scalability to adjust to ongoing changes in rates and capacity in the global shipping market.

-Boost savings potential and improve tracking and forecasting in annual and ongoing year-round carrier negotiations.

Why Keelvar For Your Logistics Sourcing?

Nearly all of Keelvar’s customers across the globe have used our solutions for improving savings and reducing time-to-award decisions in at least one mode of transportation procurement. 

Among the reasons global brands choose Keelvar are: 

  • Our ability to scale and support large-scale, complex annual transportation events with greater ease. 
  • In addition to benefitting buyers, our solution is designed to improve competitive and creative bidding from the carrier’s perspective. 
  • Our advancement of the procurement process by adding in AI-powered intelligent sourcing automation capabilities. 
  • Strong support from our Customer Success and Professional Services team to help with transportation sourcing event design, management, and achieving business goals. 

Our customers have been using Keelvar’s solutions to respond quickly to volatile market conditions, and where the lowest price isn’t always the key awarding criteria. We’ve heard from many about how our solutions have supported hundreds of their transport events across all industries, all transport modes, and all geographies in meeting myriad unprecedented challenges. 

Thanks to a combination of an intuitive user interface, powerful optimization and automation, our sourcing solutions provide results and savings that are simply not achievable using Excel or basic eSourcing and TMS (Transportation Management Systems) tools. 

Whilst there are many things that machines will never be able to do as well as humans, there is also no shortage of tasks for which machines are faster, more accurate and cheaper. Data cleansing, outlier detection, data discovery, learning and reinforcement schemes to reward/penalize good and poor suppliers, respectively, are examples of tasks where machines can outperform experts. 

Our sourcing bots leverage AI and sourcing optimization to help teams offload the onerous, detailed event tasks that are better left to machines, while humans maintain full control and oversight. 


With supply chain turbulence set to continue, there is no question that technology will continue to transform logistics sourcing and procurement. And against the backdrop of a disrupted freight procurement market with rates and capacity under historical pressure, innovative procurement teams are increasingly looking to understand how people and sourcing software might best interact to achieve the business results they’re striving for. 

For more information on using sourcing technology to combat logistics sourcing challenges, download a copy of our eBook 'Tackling Supply Chain Shocks With Sourcing Tech' here.

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