The tables have changed dramatically since last spring, when economic shutdowns caused demand to drop, causing truck loading rates to drop to less than $ 1 per mile. Over the past year, transportation costs for shippers have skyrocketed as spot market rates are well above $ 3 per mile, which has also resulted in contract rates rising.
As long as the current environment of strong demand persists, spot rates will remain high. While orders for new trucks and the end of social distancing promise an influx of new capabilities, it’s unclear exactly how much and when that will happen.
In an exclusive interview with FreightWaves, Transplace CEO Frank McGuigan presented Transplace’s latest logistics solutions platform offering, Intelligent Spot, which is powered by cutting edge technology, a team of domain experts. and its extensive network of impartial carriers to ensure transparent and true execution of the cash market. Shippers already using Transplace’s Transportation Management System (TMS), as well as those not ready to leave their old TMS, have access to real-time, API-powered, real-market spot rates and a completely transparent execution of the expeditions.
McGuigan said that as transportation markets become more volatile, the industry must focus on providing shippers with solutions that ensure accountability and transparency while tackling difficult relationships with carriers. after countless turndowns of offers – or what McGuigan calls “Freight Abandonment.”
“What sets Transplace apart in the market is that we look at a shipper’s network holistically. Over time, we understand its performance trends, and then successfully design technologies and sourcing strategies that limit risk and maximize performance. Essentially, we elevate the shipper network on our platform, enabling our technology and field experts to design and execute the best possible result. ”
Shippers need immediate support, information and solutions
For many shippers, the process of finding spot capacity is problematic. They are struggling to find the capacity or the capacity alternatives they have found are significantly above market cost. Without technology or data, the process is manual and shippers lack visibility into current rates in real time. Additionally, the pool of carriers available to most shippers is limited, with digital and traditional brokers filling this gap quickly, but not necessarily at competitive prices. Digital load charts and cargo matching systems are additional options, but these tools are not always real-time and may lack accountability for scale and service.
Some TMSs also provide auction modules that reduce manual intervention by using a network of shipper-approved brokers and carriers for pricing and capacity. “While we appreciate the impact of automation, the area of auctioning may be limited and not lead to the desired price competitiveness,” McGuigan said. “Our flexible approach allows us to send a point load through Transplace Network Services, leveraging our $ 11 billion network to find the optimal solution for that load, which may or may not be in the spot market.”
Transplace Intelligent Spot provides a shipper with a turnkey solution for uncovered shipments using Transplace’s technological platform. Intelligent Spot provides available capacity via API powered connections to Transplace’s carrier network, including dedicated and private fleets, for rapid capacity provisioning while simultaneously evaluating alternative capacity options, including travel opportunities continuous, consolidation and pooling.
Technology adds order to the auction frenzy by examining collaborative services and strategic operators within the Transplace network – while providing speed and reduced market exposure for the customer. Once a solution is found, Transplace owns the outcome and is responsible for service and cost management.
When a shipper deploys the logistics solutions platform, Transplace can identify where a shipper’s truck loading network is underperforming. For example, a shipper can see that their average cost per line last year was $ 1,000 and was 94% on time. Now that same route is running at $ 1,110 – an unexpected 11% increase – and is only 88% per hour, revealing a critical loss in revenue. Transplace experts can assist shippers with market analysis, sourcing actions and strategic collaboration opportunities using technology like Transplace Lanehub to mitigate lane issues. In January 2020, Transplace added Lanehub to its logistics platform, allowing shippers to find complementary freight routes with other network partners, thereby reducing shipping costs.
Transplace’s goal is to advance its logistics solutions platform both through innovation and acquisition, enabling the Transplace team to deliver alternative capacity solutions to shippers in an efficient and cost effective manner. . In the end, all players win with a reduction in empty kilometers for carriers, increased competitiveness for shippers and a reduction in carbon emissions across the network.
“We are committed to providing our shippers with actionable insights to drive supply chain agility, transparency and predictability. The future success of digital platforms depends on how we tailor and deliver them to deliver real-time value to senders, regardless of market conditions, ”said McGuigan.