The Secret Sauce for a Successful Sourcing Event

Over the years, TranzAct has negotiated billions of dollars in sourcing events resulting in hundreds of millions of dollars saved on behalf of our customers. And we love it when we consistently deliver savings above and beyond our customers' expectations.

For example, on a recent project a shipper came to us and told us their LTL carriers were looking for rate increases in the range of 6% to 8%. So they asked us to conduct an RFP with their carriers on their behalf and were delighted when we negotiated rates that were actually 6% to 7% lower. Overall, their rates will be about 13% to 15% lower than they would have been before retaining TranzAct.

Frankly, we weren’t surprised because we have developed a proprietary process based on experience that consistently delivers outstanding results. So for all those shippers who are using a procurement based sourcing process to select your carriers and negotiate with them, the message is real simple: you are leaving a lot of money on the table. And that is why I address this issue in our recent blog: Here’s The Problem: Your Procurement Driven Transportation Sourcing Process Stinks!

As the recognized expert in helping companies negotiate effective LTL rates with their carriers, we are frequently asked, "How do you do that?” Normally we would respond, "It’s the secret sauce we use! I mean Coca-Cola doesn’t publish their formula, do they?" But folks, we are well aware that these are not normal times.

Having said that, here are three things you need to do if you want to have a successful LTL sourcing event in today’s transportation environment:

1. Give the carrier a great profile with accurate data. This profile must address what is being shipped, where it is being shipped to/from, and when it is going to be shipped (a.k.a. monthly freight volumes). Without accurate data, it's impossible to create the type of profiles that give carriers a clear picture of what they’re going to be handling. And carriers will respond with “safety” pricing that protects themselves in case you’ve unintentionally misrepresented your book of business. 
2. Use technology. Take advantage of software that can help you to analyze and understand the bids you’re getting back so you can make the right choices about which carriers you should use. The right technology will help you understand your options. 
3. Understand carrier networks. When you understand and effectively use lane matching processes, you're going to get better rates! Why? Because you are not asking carriers to handle freight that’s outside of their network or unprofitable for them.

If you're considering a sourcing event, we encourage you to take advantage of our complimentary rate benchmarking. 

In this week's video we also talk about some bullets that shippers recently dodged and the importance of having contingency plans in case a sudden disruption occurs.