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Are your freight contracts agile?
Many companies are taking active steps to improve agility in their supply chain planning and execution. While helping them on their agility journey, I have often seen that their existing freight contracts become an obstacle.
Most companies are still using their earlier process of periodic freight contracting, either quarterly or annually. It is an effort-intensive exercise to call various freight contractors and engage them in a reverse auction for various transport lanes. It culminates in the company selecting two or three contractors for each lane. However, there are days when these partners default in placing a vehicle as they don’t have a vehicle available at that time.
Such placement defaults lead to delay in consignments and a loss of agility.
Advancement in communication infrastructure and emergence of digital freight network providers can now help us in overcoming this obstacle by moving freight auctions to ‘On Demand’, which is easier to execute and gives us a choice of many more transporters bidding for that consignment.
I would recommend companies who are serious in their agility journey to consider and embrace the on-demand freight auctions.