Is there a perfect split of contract to spot in transportation?
It depends, of course. But one thing is clear: the balance is shifting.
Navigating transportation procurement and assignment decisions can be daunting. The freight market is as volatile as ever and the traditional method of establishing contracts with carriers, to lock in prices and secure capacity, is no longer as efficient or reliable.
This so-called coverage procurement approach with a 'set it and forget it' pricing practice has been creating ghost lanes (lanes that don't materialise), higher transport rates, extra work for procurement teams, and damaging carrier-shipper relationships.
Written by Dr. Angela Acocella, a Researcher at Tilburg University School of Economics and Management and the MIT Center for Transportation & Logistics, this report contains actionable insights, based on scientific research and data collected from Transporeon customers. Find out:
- Why a coverage procurement approach falls short in delivering the intended advantages to shippers.
- How shippers can identify network segments unsuitable for contracts and strategically opt for spot assignments for better outcomes.
- How alternative contracts like dynamic pricing can outperform traditional fixed-price contracts, delivering better results for both shippers and carriers.