Drawing carriers to an electronic table

Drawing carriers to an electronic table    An interesting individual product that transportation procurement technology provider CombineNet offers is something called Expressive Bidding.
   Part of the company's core Advanced Sourcing Application Platform (ASAP), Expressive Bidding allows buyers and sellers to give and take during the electronic procurement process. That can often help carriers as much as it helps shippers.
   Greg Holt, director of marketing for CombineNet, said the system allows anything a shipper might ask in a request for information (RFI) to be used in bid analysis and optimization scenarios. He said it's not only a way for shippers to better analyze bids, but a way for carriers to stress their strengths and add value to a piece of business.
   'It allows shippers to look at unbundled and bundled bidding,' Holt explained. 'A sourcing event might include hundreds or even thousands of lanes. Some might involve the same port pair but different equipment types. Less sophisticated systems tend to bundle these lanes ' maybe by origin or equipment type. That shortchanges things, because the entire bundle might be rejected by a carrier only because of one problem. Most of our customers will treat each lane as an individual item and that gives each carrier a chance to bid on each piece of business.'
   Holt said Expressive Bidding allows carriers to suggest alternative routings and for shippers to explore those scenarios.
   'A shipper may be used to sending its cargo through Long Beach, but a carrier can offer an alternative service through L.A. or Oakland to reach the destination point,' he said. 'This is a way our customers can use their carriers as the experts. Your supplier typically knows their business better than you do. The carrier can say, 'This is what I'll do and this is how I'll price it. I'll get it to the destination in the most efficient way.' It might be a different transit time, but the shipper will be able to weigh those decisions.'
   The system also allows carriers to fill capacity on underused sailings or routes by offering discounts to shippers on secondary routes.
   'I have an incumbent shipper from Hong Kong to Seattle,' Holt said. 'At the same time I have capacity from Hong Kong to Long Beach. I've never done business with this shipper to Long Beach, but they do business to Long Beach. I can set up a scenario (which CombineNet calls a conditional offer) where if the shipper gives me business to Long Beach, I'll give them a discount to Seattle. It allows a more strategic view of what your network looks like.
   'The customer can focus on business strategies. You can measure the total cost of ownership effect of slow steaming, for example. This Expressive Bidding concept is very carrier friendly. It allows even the smaller carriers to bid on large events because you're not bundling everything together. It allows them to compete on their strengths and not just on the price.'
   Carriers and shippers can also make volume discount-based conditional offers.
   'It's about as close as you can get to face-to-face negotiation in an electronic format,' Holt said. 'The most easy example is a volume discount. If you give me $1 million of business, there's a 3 percent discount. For $20 million, it's a 6 percent discount. It's a way carriers can be strategic about negotiations with a shipper.
   'When carriers feel like they're wearing the pants, they feel less need to offer conditional offers and sweeten the deal. But the pendulum swings. And when the pendulum swings, you see the parties use the system differently. There's a friendliness, a usability with our system. We've gotten new clients from carriers saying to their shippers, 'you should take a look at this.' '
   Or as Bob Dusch, CombineNet's director of professional services, said: 'Our environment is more about looking for win-win situations than hitting people over the head.'