Bringing Integration and Automation to Spot Freight Procurement

For most shippers, spot freight procurement is unavoidable. No matter how well you project demand and manage freight procurement, there is going to be a need for uncontracted freight. Sometimes that need is seasonal, but it is increasingly being driven by rising freight costs that are causing contract carriers to reject loads at the contract price and pursue opportunities based on current rates.

Balancing Speed and Cost

That creates challenges for shippers in ensuring timely capture  of spot freight capacity, and in optimizing their transportation network. Time-sensitive spot freight procurement processes add complexity to already intricate freight management processes and can be disruptive to operations.

Transportation planners may also tend to sacrifice cost control for speed when procuring spot freight. With the clock ticking, spot loads may go to the first qualified carrier to respond, particularly when traditional phone and email processes are used to find capacity. There often just isn’t time to collect and analyze competitive bids.

Digital freight marketplaces have emerged to streamline processes and increase competition on brokered freight. But there are multiple marketplaces operating today with different carriers participating in each. No single platform can ensure the potentially best carrier will see a particular load. It’s possible to juggle results from multiple marketplaces to improve your odds of getting the best rate, but if you’re doing a lot of spot freight this quickly becomes cumbersome. Freight brokers can help manage the complexity associated with spot loads and address needs beyond truckloads, but you can’t be confident costs aren’t higher than they could be and there is little ability to audit transactions to determine how decisions were made.

Integrating Resources through Capacity Connect

Contract carriers, digital marketplaces and brokers can each play an important role in enabling shippers to meet spot capacity requirements, but none provides a total solution on their own. However, there is a way to ensure each resource is being used effectively without compromising speed to market. It’s called Capacity Connect from DHL Supply Chain.

Connecting shippers with available capacity – wherever it can be found – is at the heart of Capacity Connect. This is accomplished through direct integration of the Emerge Spot Marketplace for truckload freight with the DHL control tower and TMS ecosystem.

Emerge is a fast-growing and robust spot truckload marketplace, but it’s also more than that. It enables integration with other digital marketplaces as well as with contract carriers and digital brokerages. As a result, with Capacity Connect, DHL can tailor a spot freight solution for each shipper that includes multiple digital marketplaces, DHL’s own network of over 300 contract carriers and DHL’s brokerage service.

With the control tower and TMS as the hub for carriers, brokers and marketplaces, a truly agnostic and highly competitive approach to carrier selection is enabled. Capacity Connect casts the widest possible net and ensures all participants operate on a level playing field.

The Power of Automation

Extended integration is one half of the equation that makes Capacity Connect so powerful. The other half of that equation is automation. By leveraging the full capabilities of DHL Supply Chain’s best-in-class TMS, spot freight processes can be fully automated.

Because the TMS is already automating the carrier waterfall, it’s perfectly positioned to automate spot procurement. Truckload spot loads are automatically identified and distributed to the Emerge Marketplace and connected marketplaces, carriers and brokers. Carriers and brokers submit bids back to the TMS where they are consolidated and presented to transportation planners based on cost. Planners can select the lowest cost bid or choose another low-cost carrier if they have any quality concerns with the lowest cost carrier. By automating the procurement process, capacity for spot loads can be secured in a third of the time – or faster – than would be possible manually.

The process is fully transparent to DHL customers through DHL’s MySupplyChain platform. MySupplyChain provides end-to-end visibility of warehouse and transportation activities, including enabling auditing of spot freight procurement and track-and-trace of all freight.

The Next Evolution of Spot Freight Procurement

Digital marketplaces represented a significant disruption to the traditional freight brokerage model by increasing competition for spot loads. But fragmentation in the market can limit their effectiveness. Capacity Connect unlocks their full potential by integrating multiple discrete marketplaces into a “super” marketplace, supplemented by contract carriers and brokerage services, to support a truly efficient and cost-effective approach to truckload spot freight management. This solution is now integrated into DHL’s LLP solution and is being used today to increase speed-to-market and reduce freight costs for DHL customers across multiple industries. Based on this success, DHL plans to extend beyond domestic truckload shipments to include air and ocean capacity, as well as expedite service.

Learn how DHL Supply Chain can tailor a spot freight solution for you with Capacity Connect.