As a transportation manager, you understand that your company needs to continually move toward full freight digitization. You know that organizations that run from it will be left behind.
Knowing that it’s necessary isn’t enough to make it happen, though, is it?
Some organizations are reluctant to make changes involving new technology because they’re focusing on cost, rather than value. And yet, LTL pricing APIs in particular offer an excellent return on investment. Their immediate and long-term value far exceeds initial costs.
A pricing API – application programming interface – is a supply chain technology innovation that is being integrated into more and more transportation management systems (TMS) as a component of increasing freight digitization.
Here are four facts leaders need to know about why an LTL pricing API is a necessity, not a luxury.
- Freight digitization isn’t going away.
Pricing APIs are part of the trend toward using ongoing technological innovations to address some of the biggest challenges in the freight industry today.
A pricing API is a digital, real-time approach to freight pricing. Carriers can update rates quickly according to market conditions; shippers can instantly capitalize on any rate reductions.
Giving shippers access to carrier lane rates in real time is a more progressive approach that allows both parties to enjoy the benefits of increased agility.
- A pricing API will more than pay for itself.
The most obvious way this happens is through ongoing immediate rate reductions that carriers make available in the system when, for example, they discount unexpected capacity in a lane.
In another scenario, you might give a carrier representative details about freight you’ll need to transport soon. If the representative decides that the load fits particularly well with the carrier’s current capacity availability, they pursue your freight aggressively with instantly updated – and potentially reduced – pricing through the API.
In both situations, you can take advantage of discounted rates with just a few clicks.
These in-the-moment discounts have an impact on your bottom line. For example, one of our customers saved an average of 12.9 percent on their lowest-cost contracted rates. In addition, a carrier using the API was able to offer clients more than 7 percent savings on top of their negotiated discounts.
It’s not hard to see how these savings add up.
In addition, real-time pricing technology also improves billing and claims accuracy. That not only allows your organization to reallocate staff to work that’s more value-added, it means that you can move those people to other positions without the costs associated with recruiting and training new hires.
- You will improve visibility and billing accuracy.
Recording every aspect of transporting goods electronically and making it available to both shipper and carrier organizations eliminates errors related to issues that include:
- Load size, weight, and dimensions
- Where and when damage occurred
- Pickup and delivery times
- Shipment location while in transit
- Container conditions for goods that are temperature- or humidity-sensitive
When a pricing API is incorporated into the TMS offering this visibility, it reduces billing errors and disagreements surrounding damages. This saves both time and money.
- Pricing APIs generate the visibility and data you need for better decision making.
Data analysis is everything today.
Freight digitization documents specifics ranging from the number of pallets shipped to the load’s weight and when it was delivered. As a shipper, you can use the resulting data to evaluate carrier performance. Combining this information with dynamic pricing opportunities lets you make transportation decisions based on facts rather than anecdotes or hunches.
Carriers can do the same, of course, using data analysis to identify which clients perform the best according to their own metrics. It’s a two-way street, after all.
This gives shippers and carriers alike an incentive to become preferred partners in an ever-changing environment that increasingly relies on technology and transparency. Partnerships offer advantages over adversarial relationships.
The choice is clear
Clinging to the old ways of handling freight pricing because what’s known is seen as less risky than something new isn’t an option anymore.
You can get the best of both worlds – annual contracts with locked-in rates plus the flexibility you need to save money by capitalizing on specific offers from carriers – with the right pricing API.
The best way to reduce freight expenses while minimizing risk is with a TMS that incorporates a pricing API. That’s an easy case to make with the right technology partner.