The time has come for freight procurement to overcome its transparency hurdles.

By Jaimie Kowalski, VP Marketing, Sleek Technologies

For generations, the freight industry has been marred in the opacity. So much so that many companies have become acclimated to relying on partial reporting or unclear data. Even more depressingly, this lack of transparency has led to a widespread feeling of distrust among partners within the industry. But this doesn’t have to be the case.

Through the growth in technology, an undercurrent has begun among the freight industry to turn operations from a “black box” into a “glass box” where shippers, carriers and third-party logistics partners can all operate in full transparency.

That said, there are still several issues preventing this transparency revolution. Here are a few problem areas that should be resolved for the freight space — and logistics industry more broadly — to reach the level of transparency they deserve.

Circumventing brokers

Brokers continue to be one of the biggest transparency hurdles in freight procurement. Image Credit: istockphoto
Brokers continue to be one of the biggest transparency hurdles in freight procurement.
Image Credit: istockphoto

The broker market is “Public Enemy #1” when it comes to transparency and trust issues. Brokers, along with DFBS, may say they provide 100% transparency, but that’s just not ture. Renowned for confusing billing, unclear surcharges and minimal performance insights, the broker market has been an anchor on moving the freight procurement space forward. However, things are changing.

With technology and the ability to connect directly to facilitate procurement, shippers and carriers no longer have to rely on the broker middleman. Moreover, “going direct” allows shippers to gain true cost of a given shipment because there are no hidden broker fees, along with carrier information such as name and capabilities which opens the door for a shipper to build a direct relationship with a new carrier to expand their carrier base and capacity. This creates an environment of transparency that’s radically different than the one offered by brokers.

COVID impacts and budget restraints

The COVID-19 economic crisis touched virtually every business sector. For the logistics and freight industries, this meant tightening margins, capacity issues and revenue shrinkage. And while some organizations leaned more heavily into digital transformation efforts they already had planned for 2020 and 2021, while others have decided to stand pat for the foreseeable future.

While conserving revenue makes sense, now isn’t the time to scale back on efforts to drive better efficiency within the supply chain. Instead, shippers must double down on investments to help streamline supply chain operations, especially within the costly freight procurement process. This means finding solutions and partners that will give them more transparency, rather than sticking with the status quo — which is likely costing them money.

Addressing organizational technology will power

The freight and logistics industries are among the slowest adopters of technology, with many still relying on methods such as cost-plus and Excel spreadsheets. This must change.

Today’s business environment depends on data. And given the rise in AI, this data needs to be dynamic so users can act on situations as they develop in real-time. Therefore, if a logistics business doesn’t have the proper tools to glean this data, they can hurt their operational oversight and lose their competitive edge to other players. 

Luckily, the logistics and freight industries have incredible fortitude and resilience that can help them drive this rapid adoption of modern technology. However, organizations must move quickly to avoid being passed by competitors and stuck in a murky operations environment that’s likely costing them millions each year.

Creating a transparent logistics and freight industry is easier said than done. With the help of dynamic technology, shippers are beginning to tackle the internal and external obstacles that have held them back from real data transparency. These shippers are beginning to drive incremental changes that create the sustainable “glass box” infrastructure all shippers deserve.

jaimie kowalski sleek technologies
Jaimie Kowalski

Jaimie Kowalski is VP of Marketing at Sleek Technologies. Kowalski leverages over 20 years of learnings from other industries to drive marketing innovation in the transportation and logistics space. She heads up marketing at Sleek Technologies, which provides SaaS that has disrupted freight procurement.