3 Hurdles of Procurement technology adoption (and why they are not relevant anymore)

A recent study by American Shipper underlined the need for innovation in modern technology for specific transportation procurement. 

3 Hurdles of Procurement technology adoption

The survey, held in April this year, states that the Logistics Environment is seriously lacking the adoption of procurement technology compared to other industries. To complicate matters further, many Logistics Sourcing professionals are unclear about which technologies are available in today’s market and their specific features. Because of this lack of visibility, very few in the industry have immediate plans to implement procurement technology and kiss their manual processes (Excel crunching) goodbye in the upcoming year. Let’s take a look at the 3 biggest hurdles of procurement technology adoption, and why they are anno 2016 not relevant anymore.

1. Available Technology retains Procurement technology adoption

The report, which was created in partnership with the National Retail Federal, the Retail Industry Leaders Association, and the Transportation Intermediaries Association, cites that professionals complain about the lack of available technology solutions on the market today that are specifically focussed on transportation procurement. Some shippers also say the solutions their organization has in place do not meet their specific needs, mostly because these solutions are NOT specifically dedicated to freight, leaving many functions completely unworkable or the least, causing a high workload for sourcing organizations.

Survey Results

The results indicate that shippers and suppliers are increasingly aware of the benefits of modern-day logistics procurement technology and its potential influence on their procurement processes, however, the majority of the participants stated not to have adopted any tools at the moment.

Only Eight percent of the questioned professionals already used freight-specific procurement technology for Logistics Purchasing activities. Six percents currently make use of their procurement functions inside their existing TMS (transportation management system). And 7% are using automated general purpose procurement systems, according to the report.

The majority, however, are using manual or spreadsheet-based systems. This year, 44% of transportation buyers said they were using manual systems, up from 39% in 2015. Sixteen percent of third-party logistics providers (3PLs) also indicated they relied on manual processes.


2. Available procurement tools lack functionalities


From the respondents, eighteen percent  stated  that current procurement systems in the market do not provide the required functionality they need, approximately the same amount that indicated this as a barrier in the previous survey. Moreover, just five percent of shippers surveyed feel that existing procurement software systems are ‘very good’ at helping organizations with freight sourcing efforts. Twenty-eight percent reported that the current freight procurement  are ‘ good’ and 27% noted to be neutral on this subject. 

How to create a freight tendertool.ahabr.tech – Request your FREE Trial


Request your free trial account ans discover how intuitive and flexible Freight Tendering can be for your organization. Please leave your details and we will contact you as soon as possible. Setting up your trials account will only take 2 minutes.

[contact-form-7 id=”7274″ title=”Trial Request”]


3. Lack of technical Expertise


Another barrier to technology adoption was the belief current sourcing systems were already meeting the needs of their organization’s, identified by 27% of shippers. This number decreased significantly, from 45% who had faith in their organization’s current processes last year. Organizational resistance to change was cited by 27% of shippers as a reason for not automating procurement processes, and 7% pointed to a lack of technical expertise needed to make a shift to an automated system as another barrier. Read the full report: 2016 Transportation Procurement Benchmark Study: Analog Strategies in an Omnichannel World

The following items will pass in this report, published by American Shipper. Almost 250 Logistics and Transportation professionals, active in Logistics Purchasing, where surveyed.

    • Whether freight buyers are tying transportation procurement to inventory strategy
    • Whether transportation is part of a company’s omnichannel strategy
    • Whether transportation procurement is more relationship- or technology-based (by mode)
    • Technology usage patterns for procurement and automated bidding
    • How retailers, manufacturers, and 3PLs differ in their procurement pattern

2016 Transportation Procurement Benchmark Study

Screen Shot 2016-09-02 at 13.25.07


About Freightender Freight Sourcing

Freightender is a spin-off from ControlPay, Europe largest Freight Audit & Payment provider. Our goal is to make freight tendertool.ahabr.teching easy, flexible and time / cost-efficient. With our cloud-based freight tendertool.ahabr.teching platform we fully automate data validation, rate cards template creation and reporting and analysis functions. This results, on average in a 90% time reduction spent on tendertool.ahabr.techs. Next to that, communications and management of the data flow with the carriers goes via the platform and not via your e-mail box.

no consultants (1)

Pieter Kinds

Pieter Kinds

CEO Freightender.com

Freightender is the standard in freight tendering. It makes the tender process lean, smarter and much faster. 
Fully cloud-based. Curious? Request a free live demo and join the Freight Tender Revolution!

Schedule Demo Freight Sourcing

Schedule Demo RFQ Management

Freightender Podcast: Digitization in Logistics and Procurement

Pieter Kinds, founder and CEO of Freightender, in conversation with Martijn Graat, founder of LogisticsMatter, a leading online supply chain and logistics news platform from the Netherlands. Podcast: Digitization in Logistics and the Procurement of Freight The...

Ocean capacity crunch fuels the importance of modern logistics software

Ongoing extreme events that impact global trade and logistics keep on happening and require logistics teams to be more flexible and agile to handle chaos and the unforeseen. While strategic thinking is very much required, tactical action is key. The right partnerships...

What is managed freight procurement? What are the benefits?

What is freight or logistics procurement and is there a difference between the terms procurement, purchasing and buying? We explain why procurement is of added value to your organisation. And we take a closer look at the increasingly 'in demand' managed freight...

Freightender and Pagero partner to offer seamless end-to-end process for freight buyers

February 25th, 2021 The joint offering integrates both company apps to provide an “unprecedented array” of logistics functionalities for buyers in the transportation industry. Freightender and Pagero have entered a partnership to provide a seamless supply chain...

Freightender CEO Pieter Kinds in panel TPM21 by JOC

Freightender CEO Pieter Kinds will join the TPM21 panel on the 25th of February. He will be speaking about using a data-based approach to Freight Procurement and Allocation. Rate benchmarking and freight procurement data As many people in the logistics industry are...

Talking tenders, mini-bids and digitalisation with Freightender CEO Pieter Kinds

It’s been a rollercoaster year for just about everyone in the logistics industry, and Freightender CEO Pieter Kinds is certainly no exception. Since the start of the year, the Dutchman has re-branded his company, navigated the troublesome waters of the pandemic, and...

How shippers and forwarders can streamline the freight tender process

In the forwarder world, there are a lot of people you typically don’t deal with as a shipper yet they are handling and responding to your tender: tender managers, pricing managers and pricing analysts. Their job is often performed under high pressure from the outside...

Freightender and Portrix Logistic Software partner to empower freight forwarder tender teams

Sep 28 2020 at 09:23 AM In 2020, the need for digitization in logistics has really accelerated and this is especially true for the freight forwarding community. One of the main areas of focus for forwarders is how freight tenders are being managed today– often a...

Freight Tenders: 5 crucial tips to ensure carrier engagement

Freight tenders are not only dependent on solid freight data (historical data). The willingness of carriers to participate in freight RFQ's is a big factor as well. In this article, we share 5 vital tips to increase carrier participation in your freight tenders. The...

Digitize logistics procurement: 5 Reasons to act NOW!

Many companies are now developing strategies to buy freight in a more digital and efficient way, creating a new structure for a lean and innovative way to logistics procurement. What are you doing? More and more forwarders discover areas for optimization and...
Join our carrier network now!

Do you want shippers to find you? Create your profile now on our carrier database platform!