During the COVID pandemic, the global supply chain has experienced unusually skewed trends as retailers try to restock depleted inventories and make up for the shortages of the past year. Consequently, the highly overwhelmed inland distribution networks are seeking sustainable ways to meet transportation demands and with viable economics.
When brokers and carriers are on the same page with shippers, freight matching becomes more rationalized and yields higher rates of load confirmations. But conflicting agendas, poor visibility into operations and communication gaps result in costly delays, making it harder for stakeholders to collaborate meaningfully for long-term relationships with the right partners.
The problem in part is attributed to the quality and depth of insights available to stakeholders at any point in the transportation continuum. For instance, there is an apparent shortage of truckload carriers, leading to congestion at the ports. But an average of 30% of trucking appointment slots for transferring cargo at these terminals go unused daily. This is due to inefficient freight matching for both inbound and outbound shipments. And those lacking true real-time visibility are left to the mercy of an unforgiving marketplace.
What’s needed is a safe harbor, an ecosystem in which all parties can collaborate on decisions driven by reliable intelligence. ShipmentX is creating such an ecosystem that acts as a conduit to all stakeholders via its suite of visibility solutions that significantly improve freight-matching operations.
“We achieve this by increasing collaboration via a connected solution that brings together all exchange platforms in the market,” said ShipmentX founder and CEO Sudhakar Vintha. “We focus on optimizing backhaul trips on all carrier routes for freight movement, hence allowing shippers to avail themselves of lower rates from a broader set of route options, reduce storage/holding costs while allowing carriers to improve capacity utilization and reduce deadhead miles.
“This approach amplifies true digital freight-matching opportunities for everyone while helping eliminate wasteful effort by minimizing ghost loads. Our solution comes at a time when carrier capacity for intermodal transportation is at an all-time low, and shippers are scouring to locate small truck carriers on the spot market and paying extra to get their loads hauled,” Vintha said.
“Matching carriers and freight particularly yields less on backhaul trips, partly because of disconnected opportunities, phantom data, fluctuating markets and weather conditions, as well as the lack of real-time visibility for the smaller operators whose line of sight into moving cargo is often limited to manually reported pickup and delivery details,” he continued.
Further, it’s on the backhaul where logistical pain points are more acutely felt in finding a freight match, which Vintha attributes largely to lack of interoperable real-time visibility solutions for stakeholders across the supply chain, both at the order or item level and at the vehicle level.
Shippers are accustomed to having one of every five load requests rejected in the past year due to extremely high demand even as tender rejection rates have been above 20% for over a year now. FreightWaves reports that this is the longest period that tender rejection rates have remained consistently at such high levels since 2018.
Sourcing a carrier through spot pricing is often the only option for shippers, especially when contracted carriers have no more room available. In addition, carriers with long-term shipper contracts running at capacity on the outbound often aren’t willing to wait for freight confirmation on the return leg. They simply find it more economical to absorb the cost of an empty return trip than idle for a few days in waiting.
High cancellation rates and no-shows from noncontract carriers, and phantom load posts by shippers, erode the credibility required to drive trust and transparency in relationships between them. Vintha said that becoming a part of an ecosystem allows carriers to fulfill and forecast capacity proactively and manage downstream revenues as well as optimize carbon footprint for every vehicle on the move.
ShipmentX connects stakeholders on one single platform, providing end-to-end visibility, actionable intelligence, real-time asset tracking and access to suppliers with competitive rates through its marketplace aggregator solution.
“We’re experimenting with a degree of transparency that has not been tried before,” said Aruna Prabhakaran, a ShipmentX strategic adviser. “We want ShipmentX to be the hub that brings all marketplace participants together, be it via ERP feeds, TMS transactions, in-house warehouse management data or simply freight-matching opportunities in the marketplace. We are on a mission to eliminate waste, maximize revenues from existing assets, reduce carbon footprint and allow for viable economics even in the case of force majeure events.”
Larger shippers and transporters are continuously looking for efficiencies within freight lanes at a regional or geographical level. Prabhakaran reasoned that insights based on operational intelligence from across these lanes are often nonexistent.
“At ShipmentX, we want to enable the ability to assimilate data from across lanes and fulfill transportation needs before looking for external alternatives,” he said. “This is the first step towards modeling operations around value drivers rather than cost centers in the supply chain. This can be a game changer for shippers and contracted transporters when the spikes in cost of service do not justify prices originally signed on in their contracts.”
Prabhakaran added, “On the other end of the spectrum, ShipmentX solutions are optimal for small and midsized players who hesitate to digitize because of the associated IT overhead. Users have a smooth learning curve associated with technology adoption due to the high degree of interoperability and the personalized customer care around operations support.”
While COVID portends an unprecedented degree of transformation across the global supply chain, other factors have affirmed the fractures in an already stressed supply chain — such as the Suez Canal obstruction, ice storms in Texas, intermodal port congestion and fluctuations in global labor markets just in the last 18 months alone. This calls for more transparent and resilient supply chains that allow for synchronized planning, fulfillment and enhanced risk-based contracts. That way businesses can respond to major shifts in market dynamics without impacting supplier costs or buyer revenues.
If the past year and a half have proven anything, what better time than now to gain enhanced visibility?
What are your thoughts on transparency in the market today? Click here to complete a short survey. ShipmentX is interested in hearing from you and would appreciate your feedback.