Lately, as I get ready to participate in some upcoming conferences as a panelist or speaker I’ve been spending a lot of time talking with shippers and carriers about how the TL sourcing events are being conducted.
Based on the input I have received – especially from the carriers, more shippers than you would expect are still using a “status quo” sourcing strategy that just doesn’t fit the realities of today TL market.
These antiquated sourcing events built around the traditional procurement playbook that basically reads: Consolidate our carrier base, leverage our volume, and push the carriers to sharpen their pencils. That may have worked several years ago before the truckload freight recession began in 2022, but not now.
The market has changed. And if your sourcing strategy hasn’t changed with it, you’re probably leaving real value on the table.
What’s interesting is… this isn’t a new issue. Back in 2023, we hosted a webcast with our friend Chris Caplice from MIT’s Center for Transportation & Logistics. Chris shared three things every C-suite leader should know about truckload sourcing. Basically, don't expect economies of scale or guaranteed contracts and expect variability.
Here we are three years later, and the challenges Chris highlighted are even more pronounced today.
The recession in the truckload market that began in 2022 is still ongoing. And that has major implications for how shippers need to think about sourcing, especially if the goal is to secure the best service at the lowest total cost.
And I want to emphasize that: lowest total cost. Not simply the lowest rate. Because low rates can be misleading. If they push you into unstable coverage or force you back into the spot market when rates rise again—and they will—your total cost goes up fast.
So, when companies talk about “modernizing” truckload sourcing, I often hear the same things that Chris pointed out: They want to rely on more procurement discipline, better technology or today, how AI can help them negotiate with their carriers.
Those things matter. But based on conversations I have been having with both carriers and shippers, there are other more important things to focus on if you want to run the most successful sourcing strategy that gets the best outcomes.
What matters most is transparency! Carriers and shippers both want transparent, honest, and forthright communication that defines clear expectations, meaningful KPI’s that matter that actually reflect how well they’re working together.
In tough market conditions, efficiency becomes a higher priority. And improving efficiency starts with good communication.
That means the sourcing event needs to be a two-way conversation where both parties LISTEN and negotiate in a forthright manner where both parties can win.
For example, shippers should be asking:
Are we giving carriers the volume we promised?
Are we creating good operating conditions at our docks?
And carriers should be asking:
Are we delivering the service levels we committed to?
Are we communicating clearly when things go wrong?
A better transparent sourcing event helps move the relationship from transactional to strategic.
That’s where TranzAct can help. We collaborate closely with both shippers and carriers to design sourcing strategies that reflect how the truckload market actually works today.
We believe the TL market will rebound at some point this year. And the companies that prepare now—by running smarter, more strategic sourcing events—will be in the best position when conditions change.
If you’re ready to rethink your approach, let’s talk.
Send us an email, give us a call at 630-833-0890, or schedule a conversation.