The transportation industry has been facing complex capacity challenges for the past years; and although nearing the end of 2022 we saw a little light at the end of the tunnel, these issues continued to affect organizations that rely on the transport industry to conduct their business activities. But who is to blame here? The world, or one’s old ways of making transport procurement?
In the era of digitalization, turning a blind eye on the technology that can help you improve the overall efficiency of your logistics is, without a doubt, the death penalty on your business efficiency and productivity. Yesterday’s ways don’t apply well to today’s market’s business requirements. In a recent Gartner® report “How to Digitize and Optimize Transportation Procurement Using Technology”, published on 9 January 2023, analysts Carly West and Nathan Lease report how “supply chain technology leaders can use this research to identify technologies to streamline and improve their transportation procurement, secure capacity and manage costs”. This report mentions TenderEasy – part of Alpega TMS as one of the transportation-specific procurement solutions.
Transportation procurement - A challenge in transportation
It’s no secret that capacity shortage remains one of the biggest challenges the logistics industry has faced during the last few years. What are the reasons behind this shortage that are making transportation procurement a nightmare to an awfully large number of organizations? They are many and they are as fluctuating as the strong increase in consumer demand, the shortage of truck drivers, the changing drivers’ behavior, the complex networks, the rising freight costs, the geopolitical challenges or the evident increase in energy costs. Although they might seem like a real struggle and an impenetrable mountain of difficulties, there are ways to turn these challenges around and prevent them from disrupting your supply chain or your tendering processes.
How do we avoid these transportation challenges?
According to Gartner Report, “Shippers face short, medium and long-time transport fluctuations that can result in volatile transportation rates, capacity constraints and tender acceptance, and many shippers still run their procurement events through manual processes, failing to take advantage of the procurement technology options”. To us, the key word here would be “manual”.
Manual processes are undoubtedly at cause when facing capacity challenges and constraints, they stop you from having access to the possibilities available to you, they keep you from the data that will answer your problems and provide you with options to do better, more, in a timely manner and at a better cost.
The recommendations from Gartner for supply chain technology leaders responsible for digitizing and optimizing transportation procurement are stated as such:
- To “decrease freight costs and increase proactive governance and risk mitigation for your transportation procurement events by standardizing your transportation procurement activity through the use of technology”.
- To “increase productivity of internal teams by moving away from manual transportation procurement activity and leveraging technology for digitization and automation of some or all of your transportation procurement actions”.
- To “optimize transportation procurement or sourcing events by leveraging technology for transportation procurement tailored to organizational needs”.
Indeed, it is proven that the digitalization and automation of the logistics processes increases greatly the efficiency of an organization’s overall business activities, giving it access to valuable data and larger networks that will allow it to optimize its transportation procurement processes and help build reliable and consistent carrier relationships.
Using Alpega's technology for freight procurement
TenderEasy – part of Alpega TMS is a SaaS Solution that allows you to manage end-to-end processes of freight tendering, supporting you in an easy-to-use and sustainable way. TenderEasy’s solution means you won’t have to look at another spreadsheet to run your tenders and you will always get the best value from your tendering process, regardless of carrier shortages and market conditions. The solution enables you to set-up your tenders across land, air or sea, benchmark current market rates, quickly identify the best partner for your business and use the time you saved not doing manual work to negotiate a better deal with your chosen carrier to identify mutually beneficial opportunities.
TenderEasy answers your challenges with the right solution:
Compliance: A common digital tool is the best way to ensure alignment, best-practice building, and adherence to corporate processes and carrier selections when working with multiple Buyers across the organization.
Transparency: All data is stored in one legacy system, from RFQ preparation, through the bidding process and to final awarding. All rules and settings are visible and easy to verify.
Optimization: With a tool that makes the transport calculations on shipment level, you are sure to make the right optimizations on your database without any “average” cheating. Multi-currency capability ensures that you also avoid non-beneficial bidder conversion rates of exchange.
Benchmarking: With easy access to best-of-breed third-party benchmarking data, you can zoom in on the areas where to drive cost down and where to back off. It allows you to make the right cost-related decisions in a professional manner and encourages bidders to follow.
Auditable: With all data being available at any time, the result of your hard work is always available for audits and can easily be recalculated based on new actual shipments and volumes with our “cost simulation” feature.
Sustainability: You are buying a service, not a cost. Thus, you are able to intelligently factor in quality, service, emissions and stakeholder preferences that are critical to achieving a competitive and value adding transport solution. With TenderEasy this is possible through the use of “scenario adjustments”.
Efficiency: With multiple stakeholders involved, running an RFQ is time-consuming. From the buyer's perspective, it is critical to focus on the value-adding activities and to find relief in the non-critical aspects of work through automation and highest possible data quality and structure.
Effective: Building on best practice, creating more time for the valuable work, making use of benchmarks, and analyzing down to shipment level, with a structured approach to sustainability, is our proven way to deliver better results than market levels would suggest. Every time!
“Growing” forward - transportation procurement software
Allowing your business to grow and exploit its full potential while moving forward is our aspiration for our clients at Alpega. With this objective and your needs in mind, we design and create solutions that will assist you and grow with you in order to reach your highest objectives while making your business and logistics processes easier, less costly and much more efficient.
Alpega TMS is a scalable end-to-end transportation management platform that tackles logistics processes to enhance their efficiency and unlock full supply chain visibility and control for optimum performance.
It provides a single source of accurate information that connects all stakeholders in a collaborative platform and transforms global and local supply chains into collaborative ecosystems. By digitizing your transportation processes, Alpega’s software solutions allow you to manage your activities across logistics networks, providing greater visibility of the logistics flows and better execution supported by automated workflows, data collection and next generation analytics to empower better business decisions.
The Alpega Solutions – beyond transport procurement
Alpega TMS is part of the Alpega Group which consists of six brands; TenderEasy, a SaaS Solution that allows to manage end-to-end process of freight tendering, supporting the professional buyer in an easy-to-use and sustainable way. Teleroute, the Pan European Freight exchange that connects to more than 70.000 carriers to offer and allocate shipments. Wtransnet, the leading freight exchange in Iberia which connects more than 10.000 companies. 123Cargo, the leading freight exchange in Romania and one of the most important freight exchange platforms in the Central and Southeastern European countries. Road Heroes Truck Driver Platform, Alpega's latest acquisition, is a specialized job site that links truck drivers with prospective employees, in an effort to give both parties a competitive edge to fulfil the market needs.
With each challenge we offer a solution. We base our strategic advice on the latest thought leadership, practical wisdom from our collaboration with clients and 30+ years of logistics expertise.
If this blog got you thinking about your own transport strategy in logistics, and you are interested in knowing more about our solutions, we would love to discuss it further with you.
Please get in touch with an Alpega TMS expert.
Gartner Disclaimer
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s Research & Advisory organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
