John Paul Hampstead, Director at Passport Research, recently highlighted how mini bids have become more popular in freight procurement as shippers seek to “hug the market” and avoid overpaying. The challenge of course is that running more regular RFPs and managing more carrier relationships can dramatically increase the workload for logistics procurement managers. In his words:
"Proponents of mini bids have the right idea about marking contracted freight rates to the market on a faster cadence and making sure that rates work for both shipper and carrier to keep relationships strong. But mini bids, insofar as they require manual work, process management, negotiation and even auctions, introduce more shipper overhead and operating cost to move the same volume of freight."
How digital freight procurement tools help
Digital freight procurement and sourcing solves this problem. As well as centralising the data and making it easy for shippers to identify the most volatile and problematic lanes, digital freight procurement tools remove the complexity and administrative burden of the RFP process.
Using Shipsta's freight procurement platform, shippers can create, amalgamate and analyse tenders from hundreds of carriers in minutes instead of days. The web-based platform automates the most time-consuming tasks and does all the heavy-lifting, using an algorithm to identify the best carriers according to the specific needs of each shipper, with the ability to prioritise price, capacity or transit time.
Shipsta's platform also integrates long-term contracts and short-term spot orders for air, sea and road freight - giving shippers complete visibility of how freight rates are changing.
Digitization in freight procurement and sourcing
With shippers having to contend with historic levels of volatility as well as highly fragmented supply chains, the traditional freight tendering process is no longer fit for purpose. Digitization in freight procurement and sourcing is helping the most forward-thinking shippers to gain constant visibility of changes in short and long term rates, across an expanded network of carriers, without increasing the administrative burden.
SHIPSTA powers smart logistics procurement with a digital platform that connects shippers and carriers to ensure a frictionless procurement process for spot and contract buying, entirely online. It automates complex tasks, provides unrivalled visibility and supports fast data-driven decision-making. Designed and built by experts in logistics procurement, it is bringing transparency, automation and efficiency to the global logistics industry. It is used by some of the world’s largest companies to respond to market volatility, control freight costs and manage risk. The company was founded in 2015 and is based in Mertert, Luxembourg and Hamburg, Germany.