Podcast: Digitization in Logistics and the Procurement of Freight
The topic of this logistics podcast is the digitization of logistics in general, and then zoomed in on the procurement of freight.
Logistics is getting more digital by the day. The logistics industry has always been a traditional industry that is often not among the early adopters when it comes to using new technology. This is slowly changing.
One of the areas where digitization can have a huge impact is in the procurement of logistics. Many logistics companies and logistics department use excel when tendering their freight. It results in dozens of excel sheets being e-mailed to potential suppliers.
Digitize: Procurement and data
Procurement departments that want to bring their department to higher levels use digitized solutions where buyers have full visibility over the procurement process. Data is exchanged digitally, and suppliers can only submit rates and other information in a set format, so analyses can be done without compiling data from different sources. This gives procurement specialists the ability to focus on activities that add value instead of wasting time on data entry and data manipulation.
Tendrx – World’s newest logistics community platform
In the podcast, Pieter also talks about how buyers of logistics can find new carriers and how carriers, even the smaller local ones, can find new customers on a new platform: TendrX.
Digitization and data
When a company embraces further digitalization and has the capacity to analyze the data, the possibility exists to use the (qualitative) data in various ways. For example, to optimize logistical and administrative business processes and negotiate transportation prices with a customer. When good data analyses are performed, this offers opportunities to negotiate with a customer on content. This is because the carrier can demonstrate exactly what costs have been incurred.
With the right qualitative data, the carrier will gain insight into which activities bring in the most profit and where processes save time, for example. Based on this insight, a company could specialize in the most profitable activities. And also terminate activities that bring him relatively little profit. The digital development of organizations thus also provides more strategic input for the chosen business model of an organization.
Freight procurement is going digital – you should too
Digital freight exchange platforms and online freight tender platforms have become the norm in the industry. One of their many benefits is the opportunity for carriers to meet new shippers.
In most digital RFQ’s, shipping requirements are presented as structured data sets rather than Excel spreadsheets. But even then, RFQ’s remain complex: thousands of trips to be specified, have multiple modes and restrictions that obviously need to be taken into account.
With so many variables to calculate such as, fuel costs, toll road costs, driver wages, manual calculations are nearly impossible. To overcome this and stay ahead of the competition, carriers can get help from digital tools that use the data to produce relevant inputs for the bid. The result: winning freight tenders to customers and prospects.