Optimizing Freight Spend:
What top shippers are doing to look beyond cost
Learn how top shippers optimize their freight spend from Amy Elgart, Lead Product Manager
Freight procurement is a complex puzzle, and understanding how to optimize costs is just the starting point. In this educational discussion, we dive deeper into the strategies top shippers are using to balance cost with other critical objectives.
Amy, our Group Lead Product Manager, explains how shippers leverage business rules—known as constraints—to fine-tune their freight strategies and achieve their unique business goals.
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Let’s start simple. How do shippers “optimize” their transportation spend?
There are two main ways to approach it:
- Lowest Cost Scenario: This one’s straightforward—allocate as much volume as possible to the lowest-cost participant. If they can’t cover it all, the next lowest-cost participant steps in, and so on.
- Rule-Based Scenario: Same idea, but with extra layers. Here, you apply business rules (we call them constraints) to decide who gets what. These rules might include prioritizing certain carriers, meeting service requirements, or spreading volume across participants.
EmergeAI takes this a step further by using machine learning to analyze the most efficient allocation of volume based on your rules. It suggests the optimal carriers, taking into account factors like cost, capacity, and service levels, helping you make data-driven decisions while saving time on manual assessments.
Why wouldn’t you want to just always use the lowest cost possible?
It’s actually rare for our shippers to only focus on Lowest Cost. Most use a hybrid approach: run a Lowest Cost Scenario first, then layer in rule-based constraints to fine-tune the results because each shipper has unique needs for their business they need to account for like maintaining relationships or achieving high levels or service.
So constraints are like guard rails to make sure you are getting the best price given a bunch of requirements?
Yes, you might create a rule to “favor incumbents” or “only award lanes to carriers offering special services.” Which might mean paying above the lowest rate on some lanes, but worth it for the strategic benefits.
Here’s the thing: Analyzing these constraints would be really complex if you were doing it with spreadsheets and emailed responses.
With ProcureOS, this isn’t an issue. All responses are centralized in one location, and EmergeAI guides you through building constraints, helping you quickly identify and resolve any issues so everything runs smoothly.
It's easy & free to get started.
With no complex SaaS contracts, implementation fees, or other hoops to jump through you can get started right away — and for free.
Take a quick demo today to see how you could be making smarter sourcing decisions.
