Growing seasonal demand, the driver shortage and tight capacity require shippers to take an early approach to planning and launching an annual RFP
Transporeon Group, global provider of a cloud-based supply chain execution platform, is recommending that shippers go out to bid sooner rather than later, to secure 2019 transportation contracts and better address the tight capacity market . With projected e-commerce sales to reach 17 to 22 percent higher than last year, and Black Friday and Cyber Monday sales forecasted to respectively reach over $2 billion to $2.5 billion, shippers are going to market much earlier this year as evidenced by quantitative data from the Ticontract transportation sourcing platform.
“There has been an increase of more than 1,000 RFPs (requests for proposals) through Ticontract year over year between July 2017 and July 2018,” said Patrick Pretorius, director of sales, Ticontract Americas. “This 20% uptick is not an irregularity, but a symptom of the unprecedented levels of increased demand.”
Going out to bid now, with next year’s capacity expectations clearly described per lane, will help shippers secure the transportation capacity they need to keep customer service levels high. Using an automated e-sourcing tool purpose-built for transportation procurement, such as Ticontract from Transporeon Group, allows shippers to uncover hidden capacity while potentially reducing transportation spend and consolidating suppliers.
“One of the benefits of the capacity crunch is that shippers have been able to identify the key geographies where they struggle with capacity,” says Pretorius. “Gathering volume and lane data from stakeholders in the buildup to an RFP can be challenging, especially when a shipper does not have a TMS or is working from multiple legacy ERP platforms.”
Pretorius adds that the current capacity situation reinforces the importance of demand planning, and transportation procurement teams are leveraging the added attention to remind stakeholders of the importance of accurate forecasting. Going through a formal RFP process in the final few months of 2018 can also keep incumbent and potential new carriers aware of upcoming volume to help shippers gain or maintain “preferred shipper” status.
Ticontract helps shippers find the right logistics service providers and reduce administrative workload associated with transportation procurement for greater market transparency, easily comparable offers and logistics cost analysis. With a supplier database of over 35,000 on-boarded and pre-vetted carriers, shippers have a greater avenue for finding potential new carriers that can support their needs for additional capacity.
Ticontract offers integrated RFP management, rate management, analytics and freight bill audit for an increased competitive advantage with the ability to identify opportunities for supplier consolidation and cost reduction.