Dynamic rating promises increased transparency, profitability

The logistics industry has experienced an undeniable technological revolution over the past several years. Companies across the supply chain are embracing technology to level up their businesses, automate tedious tasks and bolster their bottom lines. Still, the industry as a whole is relatively new to high-tech solutions, and at many companies, employees continue to take on some of the most time-consuming manual tasks, like rating shipments and correcting invoices.

In the logistics industry, up to half of all shipments are still manually rated, according to research from the IT experts at Sciant, an IT solution company that specializes in delivering rating solutions for the logistics industry. The team found that it takes two to four minutes to manually rate a single shipment. If a company has 1 million shipments annually and 30% are manually rated, taking two minutes each, that comes to six hundred thousand minutes — or more than 10,000 worker hours.

If companies can cut down on the number of shipments or services being manually rated, they can expect significant gains in both efficiency and accuracy. While humans will always be needed to handle special or unusual cases, utilizing technology to perform simple tasks has been consistently proven to reduce mistakes and increase profitability. That is where Sciant’s services related to dynamic rating solutions come into play. 

“There are quite a lot of activities happening in freight. Multiple parties are involved in a package reaching your house. There could be on average about 6-10 activities per shipment, and to build the full end to end picture, including customer facing charges, supplier charges and internal charges, you could end up with about 20-30 charges for one shipment,” Sciant CEO Angel Mitev said. “Depending on how individual rates are managed, you could end up with hundreds of thousands of different rates being maintained in a TMS. All these rate cards will have to be maintained and regularly updated and this has to happen dynamically. This is the business problem we are solving for our customers.” 

Dynamic rating is particularly useful for companies facing opaque rate changes or struggling with transparency related to profitability on a shipment level. In an industry as complex as logistics, it is common to lack visibility. This is especially true of rates, which are influenced by a variety of factors, as well as expert guidance and differences within companies themselves. The logistic companies should meet the ever-rising customer expectations, and still generate profit and growth. By improving their rates management processes, they can simplify the customer experience, and still be competitive and profitable.