Edmund Zagorin, co-founder and chief strategy officer of Arkestro, believes the current tariff war and trade volatility could spur lasting transformation in the global supply chain.
“Never waste a good crisis,” Zagorin told FreightWave. “Leaders that are savvy are using this as a way to say, ‘look, there’s a lot of changes we’ve wanted to make. There’s never been a better moment to take AI and use it to perform some of these tasks that are very resource intensive.’”
Zagorin said supply chain leaders should view tariffs not just as a cost to manage — but as an opportunity to accelerate innovation and resilience.
“The cost of complying with tariffs — not even the tariffs themselves — has reached between 1% and 3% of the cost of every product,” Zagorin said. “Companies are spending enormous time and energy just figuring out what rules apply, and that’s unsustainable. The leaders I talk to are using this moment to rethink how procurement operates.”
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San Francisco-based Arkestro was founded in 2017 by Zagorin and CEO Robert DeSantis. The company is a predictive procurement orchestration platform that utilizes behavioral science, game theory and AI to predict and win faster value across all quoted spends.
To show how AI can help the procurement process, Arkestro is hosting “Optimal ’25: The Celebration of Game-Changing Procurement,” on Oct. 29–30 in Houston. The event will bring together global leaders from industries such as retail, manufacturing, oil and gas, and chemicals to explore AI-driven procurement transformation.
Zagorin said the idea for Arkestro came from recognizing how much time procurement teams waste responding to inflated supplier quotes. Most companies already possess vast data on what they’ve paid and what they want to pay — data that could be used proactively, he said.
By applying AI and simulation, Arkestro can predict negotiation outcomes and generate “suggested offers” for suppliers to review, flipping the traditional dynamic. This approach, Zagorin said, can cut 60% to 90% of sourcing time while improving pricing accuracy and decision speed.
“Arkestro generates tens of thousands of quotes every day,” Zagorin said.
AI is beginning to reshape freight procurement, giving large shippers and global 3PLs new tools to negotiate rates, accelerate bid cycles and manage tariff costs.
The global AI in procurement market is projected to surge from $1.9 billion in 2023 to $22.6 billion by 2033, growing at a 28.1% CAGR, according to data from market.us. North America currently leads the market with a 38% share, or about $700 million in revenue.
Platforms such as Arkestro, Fairmarkit and Pactum are gaining traction with Fortune 500 manufacturers, energy companies and retailers that manage complex sourcing and volatile freight markets. These systems simulate bids, generate suggested offers, and cut sourcing cycles from months to weeks.
Zagorin, whose company works with Fortune 500 manufacturers like Chevron, Koch Industries and Valvoline, said the past year of shifting tariffs has exposed how reactive many supply chains remain.
“Most enterprises and procurement organizations are not staffed with people that have subject matter expertise in customs and duties and the correct procedure or how the rates change based on country of origin and so forth,” Zagorin said.
Zagorin’s advice is to move from reactive to predictive and he encourages companies to adopt “test-and-learn” approaches with AI procurement tools.
“We see the enterprises that are being really successful with AI now have developed a way to quickly pick a few technologies and use them and then see if there’s benefit as far as what they want to do,” Zagorin said. “The enterprises that are really struggling are the ones that are six months into designing a request for proposals for this technology.”
