Benjamin Franklin famously said that “If you fail to plan, you’re planning to fail.” While this is certainly true, it doesn’t mean that coming up with a plan and an executable strategy is easy, especially in a very volatile and uncertain market like we are experiencing currently. So, if you’re a transportation executive, what are the key factors you need to consider as you develop your strategy and plans for 2022? That is the central question I discussed with Heather Mueller, Chief Marketing & Product Officer at Breakthrough, in a recent episode of Talking Logistics.
The Key Issues
I began our discussion by asking Heather to share the top-of-mind issues she hears from shippers. Heather notes that planning for this year seems a herculean challenge for shippers.
“What feels most urgent to shippers is getting capacity,” says Heather. “How do I make sure I can move my products to market so consumers can buy them? I don’t think that pressure is going to subside in 2022.”
Heather states that longer term, she sees shippers taking a broader look at their transportation procurement strategies to level set their transportation needs. “Shippers are planning sourcing strategies that are more agile and nimble than in the past. That’s a positive sign,” she says.
“The other thing we’re seeing is corporate sustainability goals coming into the supply chain and transportation. How we handle that in addition to all the other pressures is the big issue.”
A Different Approach to Transportation Procurement
With the new look shippers are taking at their sourcing, I asked Heather if that has changed the typical annual RFP approach to procurement. Her response was, “that depends.”
“What I like is that companies are being more thoughtful about what’s the right fit for them. There are some instances where a full network annual RFP makes sense. For example, some of our customers have seen a major change to their networks due to acquisitions or entering new markets. That’s where we think a full network RFP makes sense.
“But what we’re also seeing is shippers thinking strategically about what they need to change and what they want to achieve. How do I get the decreased cost, increased capacity and improved service levels that I need at a facility or customer level? That’s a more focused approach to sourcing.”
Leveraging Data and Technology
Heather points out that to understand your procurement and transportation needs requires data and analytical capabilities. You want to know where the capacity is to determine network fit; whether you’re getting fair pricing, especially if you’re not doing a full network RFP; and a technology partner who can not only provide the data to ensure you’re getting the right capacity fit at the best contract rates for your desired service levels, but also provide the information to present to management.
“With the transportation data, it quickly becomes clear which partner relationships are working for you and which ones are not,” Heather says. “The ability to understand the effectiveness of the relationships before any strategies are enacted is foundational.”
An Exciting Future
Heather feels this is an exciting time to be in transportation due to all of the new trends and capabilities emerging in the near future. She mentions data and network platforms, autonomous trucking, new energy options, sustainability considerations and several more developments. For all of her insights and advice on those topics and more, I recommend you watch the full episode. Then keep the conversation going by posting a comment and sharing your own thoughts and perspective.