The massive fluctuations in the freight industry over the last three years have been unprecedented. As well as the effects of COVID, port congestions, supply chain bottlenecks, energy cost rises, and geopolitical instabilities that exhibit no signs of ending.

Freight procurement in this environment has become massively complex for shippers. As the number of business units, countries, products, suppliers, and customers increases, many discover that supply chain complexity is not linear (in line with business growth), but increases exponentially.

Growth in complexity tends to lead to higher costs – it takes time and effort for procurement teams to search for the best prices from standalone data sources, and manual processes are not only less efficient, but can also lead to cost sinks.

Many companies still rely on manual workflows or generic platforms, which are not suited to address transportation complexity. Traditional tendering processes comprise email, Excel sheets, calls or texts to suppliers, or, more often, a combination of all the above. But by using technology, enterprises can move away from manual workload and reduce logistics costs.

The success story below reveals how digital freight procurement can empower logistics teams, while also receiving global recognition for bringing a unique value to the industry.

SHIPSTA and Holcim were joint winners in the Best Procurement Technology Provider category at the 2022 World Procurement Awards. “Thanks to SHIPSTA, we have significantly increased our cost competitiveness on the tendered freight volume. We are managing our freight procurement more efficiently and our country teams are enabled to operate more strategically,” said Alexander Scheld, Global Head of Logistics at Holcim.

Tight margins at scale

Holcim Group, a Swiss multinational company manufacturing building materials, supplies low-cost-per-tonne materials for construction on a large scale and procures transportation to serve its multilingual customers in over 50 countries.

Credit: Holcim

To handle its high volume of shipments, the company used to contract thousands of trucking providers on a spot or contract basis, executing tenders manually. Each regional market worked with its own supplier base, with the effect that the country-based teams had to manually compile data to get oversight of its logistics procurement.

Manual processes in multiple geographies inevitably create high costs. Plus, for the head office, it was difficult to formulate a longer-term strategy across the group without having reliable rate transparency. The answer to Holcim’s situation was a technology that centralized freight operations, bringing logistics suppliers & procurement decision-makers together under one “digital” roof to drive a cost-effective strategy.

Global (and regional) execution power

The digital freight tendering platform from SHIPSTA allowed Holcim to easily execute tenders and analyse quotes from all suppliers at a glance, gaining actionable insights and higher supply chain visibility.

Decision-makers at Holcim could choose the best carriers while addressing the specific requirements of each geographical market. “We wanted everything in one place to enable seamless integration between the supplier’s quote and our ability to evaluate it,” said Alexander Scheld, Global Head of Logistics at Holcim.

Holcim took the wise decision to transform its freight procurement country by country, ensuring the digital procurement solution was rolling out successfully across all markets and business units.

As the project proceeded, instead of manually gathering quotes from calls, emails, and messages, every freight forwarder simply responded through SHIPSTA. Hundreds of carriers were smoothly onboarded to the platform and could respond automatically to requests-for-quotation (RfQs) when they were willing (and capable) of fulfilling the criteria.

This simplified the process for Holcim as a single point of oversight visible by decision-makers in each geography. In addition to securing better prices, Holcim’s country teams now save hundreds of hours, moving from days to minutes to create complex RfQs, and gain higher execution power by procuring faster and data-driven.

Despite operating in multiple markets, currencies, and languages, SHIPSTA’s platform integrates Holcim’s full logistics portfolio globally. It provides a central dashboard from which decision-makers can see market trends, execute quickly on the best prices and ensure competitive costs. With near real-time figures at their fingertips, Holcim’s procurement teams can plan more accurately and call decisions with a high degree of accuracy.

SHIPSTA’s investment in UX & UI design makes it user-friendly also for suppliers to sign up quickly. The platform enabled Holcim to easily invite all its suppliers and run tenders in just a few minutes.

Read more on SHIPSTA’s website to find out how the digitalization of freight procurement can bring significant advantages to any industry or enterprise and request a demo to find out how it could improve your supply chain logistics today.

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Over the last few years, chaos has been the norm for many sectors – especially for the freight market. Supply chain issues making mainstream headlines over the last 12 months have shown the importance moving goods internationally plays in the world’s economies.

At the time of writing, spot prices in freight procurement remain, against historical trends, lower than contract rates offered to shippers. The procurement teams in many companies are still highly risk-averse, and with several good reasons:

• High fuel prices & energy supply crisis leading to higher transport surcharges
• Macro-economic uncertainties, affecting global supply chain forecasting and planning capacity
• Shifts in consumer demand, as an after-effect of a tumultuous last couple of years

These, in addition to daily challenges, have kept logistics and procurement professionals working harder than ever. The good news is there are, however, some innovative digital solutions available to help shippers get the best value for money in this fluctuating marketplace. In addition to several advantages of digital solutions detailed in this recommended ebook for supply chain leaders, this article aims to look at some of the methods in which such platforms can transform a business while providing a competitive advantage in the market.

Source: SHIPSTA

Moving on from the basics

Transforming a business’s internal freight procurement processes, moving away from locally-shared Excel sheets and standalone data sources can bring significant advantages to procurement professionals and, critically, the company’s bottom line.

Daily, teams are re-negotiating contract rates while trying to stay on top of market rates for spot buying. Access to services that compare available rates brings already a good added value, but in most instances, there was still an element of manual intervention needed in the form of emails, calls and texts to known contacts in the industry.

More experienced procurement professionals are looking for a business-focused decision-making process that yields more competitive prices and work efficiencies. Additionally, prices, even on long-term contracts, are subject to change much more quickly – such as the latest 13.3% drop in contract rates recorded by the XSI® in January. Manually keeping tabs on this is increasingly impractical in order to act with speed as the market changes.

Integration as the next step

Integrating a specialized freight procurement platform is a relatively simple process. By pulling together prices and market rates from multiple vendors and suppliers, companies can manage shipping rates for all types of modes of transportation, while proceeding with further operations in one single place.

Specialized software logistics experts can implement a freight procurement platform that not only saves a huge amount of time, effort and cost, but also facilitates a seamless integration with key partners in the overall supply chain ecosystem and other relevant legacy systems, enhancing the procurement performance of any organization.

The result can become the first port of call for a freight procurement team tasked with getting the best value. In the same way that consumers can compare (for instance) insurance quotes, centralized freight cost data lets procurement pros make more intelligent decisions and react quickly to market fluctuations.

Many of the advantages accruing from integrating such a digital platform include:

• Centralizing all freight rates from standalone sources in one single place
• Going from months to minutes in executing RfQs
• Automating transport allocation & assigning suppliers with a single click
• Data-driven decision making, saving costs, integrating real-time data & different other personalized criteria, including sustainability

In spot and contract buying, automating procurement processes through a platform connected to multiple freight providers’ figures reduces the time spent physically finessing deals and increases the time available for strategizing and forward-planning.

Procurement hero: powered by data & automation

Additionally, the business intelligence and execution power available to enterprises when using an integrated, interconnected freight procurement platform (like that from SHIPSTA, winner of Best Procurement Technology Provider award at the World Procurement Awards 2022), can be truly transformative. Even after a few months’ use, rich data can be leveraged across organizations in a number of ways:

• Comprehensive rate history broken down by route, modes of transportation, supplier and more
• Decision-making based on market data and historical performance
• Prescriptive and predictive analysis, autonomous freight procurement

To learn more about how such a dedicated platform can turn you and your team into freight procurement heroes, sign up for a personalized demonstration from SHIPSTA. The platform will at least fire your imagination and lend some inspiration to move forward in the digitalization journey.

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