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Mitigating financial risk by automating spot transactions

Are you satisfied with how you are able to address today’s transportation market challenges? Hiring in response to surging demand is becoming an antiquated practice.

(Photo: Jim Allen/FreightWaves)

This has been an unparalleled year for the logistics industry. Thanks to a combination of surging consumerism and continuing pandemic-related stressors — including equipment delays and the ongoing driver shortage — carriers have struggled to scale up and meet the demands of the market. With capacity severely strained throughout 2021, shippers were faced with fierce competition, delivery delays and historically elevated rates. 

Shippers have found that many of their old business practices do not hold up under the extreme pressure of today’s market conditions and consumer expectations. Many have opted to automate various different tasks, including spot transactions, in order to increase efficiency and improve customer service.

“With the current market conditions, the utilization of spot tendering is higher than normal,” IntelliTrans’ President Ken Sherman said. “With the amount of volume in the market right now, it is really tough to handle spot transactions with a manual process. If you’re handling it manually, you’re going to respond slower and the bid you want to accept may be gone.”

IntelliTrans offers two different automated spot bidding options, allowing shippers to change their strategies as needed in order to move loads as quickly and efficiently as possible while still securing a competitive rate.

With the company’s most hands-off option, shippers can provide a range of reference rates for a load and enable automation acceptance. This option also allows shippers to instantly accept competitive bids from carriers they are already doing business with. Shippers have the option to tie these rates to popular market indices, setting offers in relation to current spot market or contract averages. 

IntelliTrans also boasts a fixed rate offering. With this option, the first carrier that accepts the load for the predetermined rate will win the load. If a fixed rate bid is not being accepted, the IntelliTrans platform allows shippers to opt into surge rates in order to move the load. 

Ultimately, utilizing digital tools — like those offered by IntelliTrans — to manage spot transactions drives down both transportation and labor costs. Companies can ensure they are getting the best rates possible for a particular load without expending the manpower required to manage these types of transactions manually. During times of surging volumes, these tools enable companies to stay competitive without adding additional employees to manage demand. 

“We’re in an unusual time. This market has been sustained, and carriers may not be able to accept contracted loads. In some places we’re seeing maybe four to five times more freight than average hit the spot market,” Sherman said. “If you hire people to manage this process and the market cools off, what do you do with those people? Leveraging technology allows you to scale up and scale down much more efficiently.”

Hiring talent is an expensive and time-consuming proposition, and the process of reallocating or laying off employees when the market inevitably shifts is bad for morale. Even if companies do expand in order to accommodate a volume surge, people are simply not as quick as computers. That means the most competitive bids will likely be overlooked altogether, claimed by more tech-savvy competitors.

“The spot market rates we are seeing right now can range from a $500 to $1,000 difference between bids,” Sherman said. “So if you don’t accept the lowest rate as soon as it comes in, you may end up spending an extra $500.”

Integration is another advantage of using an automatic solution. IntelliTrans includes its TMS and spot offerings within the same platform that houses its visibility, freight pay and inventory management solutions. This simplicity cuts down on opportunities for error, increases productivity, and reduces distribution, transportation, and warehousing costs. 

Click here to learn more about how IntelliTrans can help your company mitigate financial risks in today’s market.

Ashley Coker

Ashley is interested in everything that moves, especially trucks and planes. She covers air cargo, trucking and sponsored content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.