Freight transport buying in the UK is changing

Opinion: Freight Transport Buying In The UK Is Changing.

I’ve been putting this out for a while now but I really think the way freight transport is bought here in the UK is changing and now is the time to react if you don’t want to be left by the kerbside.

I see shippers attempting to consolidate their relationships with incumbent carriers, allowing them more flexibility (in most cases) with compliant subcontractors but at the same time trying to reduce service costs for longer contract periods.

Where this isn’t working for any reason, they seem prepared to reduce, minimise or even break long standing relationships in favour of untested or lesser known service providers, either without a contract or a much shorter one.

At what cost though?

Shippers and carriers alike are under pressure to improve margins, reduce costs yet maintain if not better service and customer experience. The bigger carriers usually have greater economies of scale yet often lack the finesse of the small to mid players. Conversely the small to mid players often don’t have the capacity to service the needs of the bigger shippers fully.

Carriers are therefore faced with the choice of investing in new equipment (not an easy choice given the cost and driver shortage), declining to take on new work (the death knell) or having to find reliable compliant subcontractors.  One answer has been transport networks – like pallet networks but without the hub and spoke – with similar minded carriers forming alliances to help with back loads, breakdowns and the like.

With a few exceptions, these still tend to be a group of self-interested individual companies rather than a corporate response to the market. Consequently, they often don’t have the ability to scale up when required.

So what is the answer?  

A super transport community that effectively brings all carriers together and allows them to share work harmoniously, irrespective of size, digitally matching spare capacity (without having to consider each other’s interests), without the unnecessary broadcasting of sensitive data, without collusion or breaking anti-trust laws and knowing that each is compliant and trusted for the work they undertake.

For the shipper, that must be the answer to a maiden’s prayer?  To work with a known and trusted partner who has the flexibility and reach to service all their needs without exceeding cost expectations.  For the carrier, it gives each and every one the opportunity to make money on a level playing field.

Add a no-touch, automated settlement capability using a digital wallet and distributed ledger that allows payments to be made instantly and you have the makings of an all-star freight procurement system.

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