Of all the aspects of freight logistics and shipping management, staying on top of logistics freight costs and trucking rates is among the most challenging and vital.
Managing freight costs with smart transportation services is essential within the volatile market of today’s national and global supply chains. In times of instability and uncertainty, rates fluctuate wildly. That makes it difficult for shippers to predict costs and determine what to charge for shipping services. And as consumer demands increase, the challenges will only increase.
Leveraging a rate repository for freight gives you greater ability to balance road freight rates, so you can keep profits high while keeping prices low for consumers.
Driving Forces of Rising Freight Costs
A quality rate repository makes it easier for logistics team managers to implement automated processes for monitoring road freight rates and transportation management services.
This approach allows for easier access to the most competitive market trucking rates available at any given time. With that, shippers overcome many of the driving forces behind increasing costs associated with freight logistics and transportation, as highlighted by Logistics Management:
Energy Costs Are Uncertain
Some experts are forecasting oil prices to reach as high as $150 per barrel in 2022. Other experts say prices will most likely only average just over $60 per barrel. Volatility and uncertainty can drive trucking rates higher in anticipation of hard times.
Ocean Logistics Are in Question
Challenges involving ocean capacity have only gotten worse. Port congestion and ballooning ocean freight costs create risk for the year ahead. This ongoing trend is forcing managers to change things and consider radical options to keep services high and prices low.
Trucking is the Backbone of Shipping
Managing logistics freight costs must be a priority for management. Increasing truckload pricing can have far-reaching implications for intermodal and other shipping options. Trucking is by far the largest market in domestic freight transportation and must be maintained.
Rail Transport Continues to Expand
Rail and intermodal pricing have seen a dramatic increase during the pandemic as air, ocean, and trucking capacity falters. With a market that is creating a perfect storm for logistics shortages, managers must capitalize on more affordable rate alternatives.
Why Do Shippers Need a Rate Repository To Control Freight Costs?
This can lead to several key benefits:
- Pre-empt market changes to better leverage competitive trucking rates.
- Overcome disruption within the supply chain and local markets.
- Source capacity for maximum trucking loads and shipping opportunities.
- Avoid overpaying for services and keep prices as low as possible.
- Increase tender acceptance rates to ensure road freight rates stay manageable.
- Maintain access to fast and accurate transportation service options.
- Improve logistics collaboration between partners through automation.
Use a Dedicated Freight Rate Data Repository to Control Freight Costs
Management must have access to freight rate data that is accurate and up to date to provide reliable, real-time market and trucking rates for all modes of shipping. And with more uncertainty on the horizon in the market, having a dedicated freight rate repository in your TMS is essential.
A dynamic rate manager can deliver even more support to your efforts to control freight costs.
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