Freight procurement threw some big surprises at us in 2021. From the blockage in the Suez Canal to dramatic freight shortages throughout the year – it certainly kept us all on our toes.
After this year of unpredictability, we've finally reached 2022. A year we're donning 'The Year of Resilience'.
This year, prioritizing resilience in your freight procurement strategy will ensure you reap success early and continuously this year. Here’s why….
Why is supply chain resilience key for your 2022 strategy?
The ability to react, adapt and persist in the face of change is what we mean when talking about supply chain resilience. And experts are predicting that 2022 will have challenges to throw at us.
- The freight shortages and delays that made 2021 a turbulent year are here to stay
- Freight rates for ocean, road and air are all expected to increase
- Congestion at ports will continue to at least mid-2022.
The last two years have given us the experience to deal with a difficult market like this. So, this year put that knowledge to use put a plan into action that ensures you hit your goals – no matter what the market throws at you. Here are some smart ways to ensure you're resilient in 2022.
How to build a resilient freight procurement strategy for 2022
Set your procurement strategy up for success in 2022 with these resilience tactics.
1. Diversify your strategy
Few shippers are sticking to the same strategy as last year. A recent survey found that around 70% of shippers are looking into more diverse sourcing options and resorting to holding more inventory in 2022. If you're not keeping up, you could find you're not getting the results your peers are.
So, here are some ways you can diversify your strategy:
- Consider more LCL shipments: It’s easier to secure space on LCL shipments when capacity is tight. This is a good solution for shipments without tight time constraints.
- Use inland routes to avoid port congestion: This option is becoming increasingly popular for routes between Asia and Europe to avoid busy and congested Chinese ports.
- Use air freight for time-sensitive shipments: Ocean cargo is reaching its destination slower than ever before, so consider air freight instead of ocean for any goods high-priority shipments.
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2. Reduce your spending to offset rising costs
Ocean rates increased by 126% in 2021 pushing budgets to the limit. And it looks like those high rates are set to increase by around 6% in 2022.
If you take the right steps now, can keep your budget within your limit this year.
- Automate your invoice auditing – With freight rates predicted to reach record highs – every department needs to be as innovative as possible to prevent unnecessary overspending. With as much as 10% of all carrier invoices overcharging you, automating your auditing can save you a lot of time and money. You can also outsource your carrier invoice auditing to offload this entirely and ensure human error in your team won’t impact your budget.
- Implement a multi-tender strategy – Tendering more frequently ensures your strategy makes the most of drops in the market – keeping your rates at the very lowest level possible.
- Invest in the right tech - Using a digital procurement platform can reduce your current spending by around 12%, so you can keep your budget steady even when rates are rising.
3. Increase your agility
A study by McKinsey found that one of the best ways to ensure your procurement strategy can tackle disruptions is to become agile. The same study found that companies that had agile supply chains were not only better equipped to handle disruption, but they were leaner and more cost-effective too!
So, what is agile? It’s the methodology big tech firms, like Apple and Google, have used to become multi-billion-dollar corporations. You can use the tactics that helped grow these companies into global giants to react to market disruptions faster and more efficiently.
4. Track and react to market changes fast
When the market is turbulent, monitoring and immediately reacting to changing rates can be the only way to hit delivery deadlines and stay within budget.
If you’re managing many different lanes that are difficult to monitor, integrating real-time data into your rate sheets makes it easy to keep up. You can see at a glance which lanes and routes you’re paying above the market for, so you can tender them to get better rates.
Autonomous freight procurement technology makes tendering these lanes lightning fast, so you don’t need to invest hundreds of man-hours to get these great results. SHIPSTA is a leader in autonomous freight procurement - learn more about why Fortune 500 companies are choosing our auto-procure solution here.
Want a know more about what 2022 will throw at us? Download the eBook below to get a full market forecast for ocean, road and air freight.
