If you’re trying to figure out what’s happening with freight rates right now, you’re not alone. For the last year, we’ve all seen market predictions flipped on their head from one day to the next – and we’re still no closer to understanding what’s coming next.
With rates sitting at an all-time high and no way to predict exactly when they’ll drop, tendering for freight contracts is complex and potentially costly right now.
The good news is you can secure good contract rates, even in this unpredictable market. Here’s how you can keep your tendering costs low right now.
Benchmark your freight rates
Carriers are just as uncertain about the future of the market as you are right now – which means they’re likely to charge you more to give themselves a financial buffer.
To make sure you’re getting the best rates right now, you need to benchmark your quotes against the industry average.
Freight benchmarking tools, like Xeneta, let you compare your quotes against rates other shippers are getting – so you never pay more for your shipping than you should.
Compare more carriers
If you were buying a new car, would you go straight to the last dealer you bought from and accept their first quote just because you’ve had a good experience with them in the past? Of course not – you would shop around to make sure you’re getting the best deal. So why don’t we shop around like this for logistics carriers?
Right now, when rates are at an all-time high, you need to be smart about your logistics cost and not settle for the first deal. Shopping around and expanding your carrier network, means you can choose the best rates for your logistics needs and take back control of your freight costs.
The good news is if you use a digital logistics platform, it doesn’t matter if you ask one or one-hundred carriers, it takes exactly the same amount of time to get a quote.
Tender more regularly
If you tender for a one-year contract right now, your quote will be based on the current rates – which are at an all-time high. This means, you could end up paying way above the market value if rates drop back down to normal levels in 2022.
Tendering more frequently means you can get a more accurate price and it ensures you don’t get locked into a contract that leaves you paying way over the odds for your logistics needs.
How frequently you can tender will depend on your freight volume and shipping geography. But no matter which factors are in play, increasing your tendering frequency is made easy thanks to today’s logistics tech.
If you use a digital procurement platform, you can automate many of the time-consuming processes that make tendering more often difficult. This means you can secure new shipping rates faster and with less effort than using manual processes.
Implement an agile procurement strategy
A study by McKinsey found that companies with an agile freight procurement strategy were extremely resilient to volatile markets, like the one's we're seeing now, even though they had a lean supply chain (which helped them keep their shipping costs low).
But what exactly is agile freight procurement and how can you roll it our in your company? This whitepaper has everything you need to know about agile freight procurement and how to implement it in your strategy.
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, SHIPSTA 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.