“Data” has become a popular word in the transportation and logistics industry over the past several years. At this point, shippers are well aware that they need access to data in order to make the best decisions possible for their business. There tends to be some confusion, however, around determining which data points are important and what exactly to do with that information once it is secured.
For shippers, the true value of data lies in its cost-saving and performance-enhancing potential. Having access to accurate, easy-to-understand information can help companies drive internal efficiencies, while also enabling them to choose the best carrier partners possible.
“Shippers should focus on asking questions that identify where performance can be improved. Things like cost savings should be easy to identify if rates on lanes can be compared to market rates,” Emerge Director of Product Management Colin Ristig said. “Carrier performance data can often be difficult to chase down, but using it to understand the ‘true cost’ of working with specific partners can help weed out carriers who might have low rates but frequently reject tenders.”
Partnering with the right carriers can be a complex decision, and making the wrong choice can easily threaten a shipper’s bottom line. That is where third-party partners like Emerge can make all the difference for shippers working to optimize their supply chain.
Through its advanced solutions, Emerge gives shippers easy access to historic rates, benchmark data and incumbent performance data so that internal procurement teams can make data-driven decisions when it comes to choosing which carriers to partner with. Additionally, sharing these data points with existing carrier partners can help improve performance and strengthen relationships.
“Internal change is really all about making the procurement process as efficient as possible,” Ristig said. “Communicating performance data externally to carriers is also critical. They need to understand what you care about, and keeping them up to date with things like carrier scorecards is critical to building accountability and establishing strong partnerships.”
Shippers can learn a lot about cost-saving opportunities from their own internal data, and being able to interpret that data is a key component of becoming a data-driven company. There are some pieces of information, however, that can only be gleaned from third-party sources. This is especially true when it comes to analyzing specific lanes or understanding the overall market.
“While having your own data is the first step to analyzing your freight network, shippers often need data from additional parties to understand how they compare to the rest of the market,” Ristig said. “This is where third-party providers can help provide market-level or lane-level benchmarks to compare against, so a shipper can do a true comparison of cost on lanes similar to their own network.”
When opting into business relationships, shippers need to be aware of the risks and benefits associated with each potential partner. According to Ristig, the most important aspect of a partner is how much value they can generate for a shipper.
“Typically this will mean how much time can they save your procurement team, how much money can they save you by introducing new capacity providers, or can they help drive rates down across your network,” Ristig said.
All partner solutions, regardless of their simplicity, also require shippers to dedicate some amount of time and money to onboarding and training. Due to this, companies should also be aware of the resources required to integrate new solutions before choosing a partner.