On-demand Freight Set to Transform Logistics
In 2018 shippers often used the spot market to find some capacity. It was also typically at budget busting prices. Fortunately, in 2019 capacity has been abundant with spot rates going for about 20-30 percent lower than contract rates.
Currently, we’re seeing a shift into peak in the last month, however, the toggling of pricing over the course of the year has been significant and simultaneously, hard to manage as a shipper or carrier.
Now, rapidly sourcing capacity and getting spot freight moved is difficult and an inefficient operation for shippers. It’s taxing minimal resources within budget-strained transportation departments. Furthermore, the absence of transparency in the market coupled with the manual work of sourcing and pricing is producing a lack of operational agility, cost creep and service failures. The good news, however, is that new market participants and technology are helping to realize the potential of real-time freight.
Now shippers are able to immediately access guaranteed rates whenever and can simply book loads without placing a phone call or sending an e-mail. In fact, by buying into real-time freight operations like Loadsmart, shippers can transport loads with confidence that their prices are market-rate within the available capacity. This way service stays on course and is reliable.
Going forward, as real-time freight businesses gain popularity within both spot and freight worlds, standard RFP and manual bid systems will be transformed.
Real-time freight scheduling and price quoting will inevitably open up a whole host of possibilities for logistics. For instance, it should create savings in soft markets, improved service in tight markets, and diminished labor costs in procurement. Despite these net gains, universal adoption will take a fair amount of time.
What do you all think? This should really be a benefit for logistics, right?