Three years ago, we were all hoping for a return to the so-called normalcy. Now, getting "back to normal" seems further away than ever.
Even with freight rates dropping steadily in recent months, spare capacity of carriers and smoother movement of goods, today’s global supply chain still has nothing to do with its status a few years ago.
But why will freight procurement not be the same? Because the pandemic has transformed global logistics; companies have faced unprecedented challenges; new technologies have emerged; markets have evolved – and we, as a society, have changed too.
All these factors have reshaped the supply chain ecosystem into a more resilient and collaborative one, but also more complex. Let's break down how global freight procurement has changed forever and what you need to focus on to deal with transportation complexity.
Uncertainty is the new normal – and will remain so
Change is the only constant – even more if we talk about logistics. Just in the last few years, we've experienced more global disruptions than in the past decades. It goes to the extent that dealing with global uncertainty is no longer just about the pandemic, but already part of Chief Procurement Officers’ strategic actions for 2023.
From natural disasters, health emergencies, energy supply crises, macro-economic uncertainties, geopolitical events, or fluctuations in consumer demand, supply chains have been shifting non-stop.
29% of logistics experts do not expect the supply chain to return to normal after 2025 – if ever again
- CNBC Supply Chain Survey
With disruptions as the new "business-as-usual", the discussion you should be having right now in your business is not about when everything will go back to the way it was, but how to be prepared to proactively respond to whatever the next scenario will be.
Greater complexity, better management
Amid global disruptions, supply chains have evolved into more resilient and collaborative, but also more complex. And this complexity is often not linear, but increases with the number of business units, countries, products, suppliers and customers involved.
More than 50% of supply chain leaders expect complexity to increase over the next five years in most aspects of the operating model
- © 2022 Gartner, How to Reduce Supply Chain Complexity
But what tactics should you take to proactively manage freight procurement complexity? Here are two key pillars on which you should base your strategy:
- Leverage industry-specific data into your procurement process to drive a cost-effective performance, integrating complex rate structures, flexible bid events and business criteria, such as surcharges, CO2 emissions, capacity or lead times.
- Ensure seamless connectivity between the entire supply chain and your business-specific tools through flexible & scalable APIs to ultimately create an end-to-end procurement ecosystem.
Having the right technologies in place, adopting a smarter management while embracing complexity will make the difference between logistics leaders equipped to navigate any market fluctuations and those struggling to minimize their impact.
Preparing for the unexpected in ever-changing supply chains
Being prepared for any scenario – whether feasible or unforeseen – is the key to stay one step ahead of the logistics market. But knowing that the next market fluctuations may be just around the corner, what could you do to always be in a winning position?
When preparing a future-proof strategy, it is essential to invest in a freight procurement solution that allows you to act in real-time and leverage relevant data. That's why equipping procurement teams with the right technology is part of the leadership vision for CPOs in 2023, both to stay ahead of the market and meet corporate goals.
95% of supply chains must quickly react to changing conditions, but only 7% are able to execute decisions in real time
- © 2023 Gartner, Leading the Future Supply Chain
Considering transportation is typically one of enterprise's biggest spend category, using an advanced platform that ensures real-time execution and cost-effective performance shouldn’t be a "nice-to-have", but a "must-have" in any organization.
Leading companies like Holcim and PUMA are already gaining a competitive advantage by leveraging freight procurement solutions to control freight costs and manage risk while automating complex tasks and gaining complete data transparency.
Which digital solutions will play a leading role in freight procurement this year? Discover the top 4 technologies expected to shape freight procurement in 2023.
