Freight e-Procurement: Benefits and how it works

The process of purchasing transportation services and goods digitally is called freight e-Procurement. This system has revolutionized traditional procurement methods by offering a faster, more efficient, and cost-effective solution.

With the rising digitalization and the increasing use of technology in the logistics industry, freight e-procurement has emerged as a solution to the challenges many industry businesses face. Through a digital platform, companies can access a wider range of suppliers, compare prices and services, and book shipments with just a few clicks.

To guarantee you can also benefit from this digital process, we’ll explain the following:

  • What transport procurement is;
  • The challenges of conventional procurement;
  • Benefits of digital procurement and how to use it.

What is transport procurement?

The concept of transport procurement refers to the process of obtaining the services required to move goods from one location to another, either domestically or internationally.

In a freight forwarding context, e-procurement uses digital tools and systems to purchase these services. This type of procurement involves using technology to streamline the procurement process, making it faster and more efficient.

An example of e-procurement in freight forwarding is the use of online freight platforms. These platforms connect shipments with carriers and operators, allowing them to book and manage shipments quickly and easily. For example, a transport manager can use an online platform to compare prices and services from different carriers, offering the best deals to shippers and booking the transport faster. Some platforms also complete the solution providing visibility into the whole shipping process, making it easier to find room for improvement and optimize the supply chain.

Challenges of non-digital procurement

Regarding procurement, many companies still rely on traditional, manual methods to compare prices, coordinate different suppliers, and purchase transportation and logistics services. But these methods can lead to a number of challenges that risk the freight forwarding operation and impact your final client.

A key challenge of normal procurement is a lack of visibility and updated information. Without access to real-time data, freight forwarding businesses and shippers will probably struggle to compare and identify the right carrier among the hundreds or thousands of options and necessary factors that need to be considered. This can lead to multiple days of research just to complete the booking itself, generating possible delays and issues in the supply chain and a lack of control over the procurement process.

Many transportation companies still rely on outdated methods like excel sheets and calls, and e-mails. Traditional non-digital procurement like these requires tons of manual efforts, such as:

  • Inputting data into spreadsheets;
  • Filtering data;
  • Manually aligning shipment and cargo type and security;
  • Calls and e-mails to double-check capacity, rates, and delivery times;
  • Back and forth of documents.

This takes time and increases the risk of errors and misunderstandings.

And since this data isn’t easily accessible, it makes it almost impossible for logistics teams to react to the volatility of rates and reduce costs swiftly. This also hinders their ability to improve and streamline their supply chains.  

Non-digital freight procurement proccess

Benefits of e-Procurement

For shippers, freight forwarders, and carriers, solutions with e-Procurement make it possible to connect and collaborate in a way that was never before possible. Here are some key benefits of e-procurement for all stakeholders involved in this supply chain process.

For shippers, e-procurement offers a faster and more efficient way to get quotes from freight forwarders. With the use of online freight platforms, shippers can:

  • Access a wider pool of suppliers;
  • Get a wider range of quotes and rates;
  • Arrange shipments faster.

This saves time and effort and helps shippers get the best value for money.

For freight forwarders, e-procurement offers a more streamlined and efficient way to manage their business operations. With access to real-time data and insights, freight forwarders can:

  • Escape from manual rate management, compare and identify the best quotes for their clients;
  • Access capacity from different carriers;
  • Book uni, inter-, and multimodal transports faster, with a few clicks.

This allows them to offer their clients better and more competitive services while improving their overall profitability.

In a survey held by McKinsey, many CPOs planning e-Procurement programs see a 40% jump in gross savings, 30-50% less time lost on sourcing transactions, and a 50% reduction in value leakage.

For carriers, e-procurement offers a more efficient way to offer and receive capacity requests. With the use of online freight platforms, carriers can offer their available capacity to a wider pool of shippers and freight forwarders. This helps them fill their trucks, trains and barges quicker while adding more business to the portfolio.

Digitalizing freight booking

With its many benefits, Freight e-Procurement has become indispensable for companies looking to stay ahead of the competition and the skyrocketing freight rates. Whether you’re looking to improve your supply chain or reduce costs, freight e-Procurement is the solution that you need.

And that’s where we – rouvia – come in. Our solution helps not only connect shippers and carriers faster and more effectively but provides unparalleled real-time visibility and transparency. Join us on our journey to the future of freight forwarding.

Benjamin Noyan
CEO and Co-Founder at rouvia
February 16, 2023

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