{"id":11611,"date":"2021-11-10T06:09:55","date_gmt":"2021-11-10T06:09:55","guid":{"rendered":"https:\/\/demos.pagifly.eu\/cargochief-backup\/?p=11611"},"modified":"2021-11-10T14:40:43","modified_gmt":"2021-11-10T14:40:43","slug":"optionality-for-improved-pricing-procurement-decisions","status":"publish","type":"post","link":"https:\/\/demos.pagifly.eu\/cargochief-backup\/2021\/11\/10\/optionality-for-improved-pricing-procurement-decisions\/","title":{"rendered":"Optionality for Improved Pricing & Procurement Decisions"},"content":{"rendered":"

Chris Arredondo, co-founder and vice president of customer success, Cargo Chief<\/strong><\/span><\/p>\n

Optionality is a hot topic in the transportation industry.\u00a0 The market is extremely volatile and reliance on a single option for moving a load is often a recipe for disaster.\u00a0 As a result, it is becoming more apparent how a broker\u2019s overarching business strategy is (or should be) impacted by optionality.\u00a0 More specifically, the depth of a broker\u2019s carrier network (the number of carriers available for a certain lane) has a substantial impact on pricing and procurement decisions.\u00a0\u00a0<\/span><\/p>\n

 <\/p>\n

Optionality Through Carrier Networks<\/b><\/h3>\n

First, pricing decisions are often directly impacted by the number of carriers a broker has available for a specific lane.\u00a0 A lane with an extensive network of interested carriers can be priced aggressively, because a broker has several backup options if their primary carrier can\u2019t service the load.\u00a0 On the other hand, reliance on a single carrier elicits a more conservative pricing strategy.\u00a0\u00a0<\/span><\/p>\n

Second, a similar story plays out with volume commitments and tender acceptance rates.\u00a0 Lanes where brokers have depth in their carrier network are more likely to see high volume commitments and tender acceptance rates.\u00a0 They simply have more carriers interested in that lane and can commit to greater volumes.<\/span><\/p>\n

Finally, the number of available carrier options even has an impact on max buy rates.\u00a0 Meaning, the specific buy rate at which a broker is willing to book a truck.\u00a0 With greater depth in a carrier network comes an increased willingness to fight for a lower rate – if the first carrier on your list won\u2019t take the load, you still have fifty more to call.\u00a0 A load with only two available carriers is a much different story.<\/span><\/p>\n

In all of these scenarios, more options in a broker\u2019s network enable that broker to make pricing decisions that result in more business won.\u00a0 While this doesn\u2019t drive down the broker\u2019s cost to serve (as we see with automation), it does have a direct impact on both a broker\u2019s revenue and profitability.\u00a0\u00a0<\/span><\/p>\n

 <\/p>\n

A Network of Quality Carriers<\/b><\/h3>\n

On a related note, it is worth mentioning that a broker\u2019s carrier network is NOT simply the number of carriers they can find on a load board for a particular lane.\u00a0 For a broker\u2019s carrier network to be of any value, it needs to be filled with quality carriers with whom the broker has a relationship.\u00a0 Reliance on load boards has a number of disadvantages, not the least of which being uncertainty in the broker\u2019s overall pricing strategy.<\/span><\/p>\n

The Impact of Carrier Networks<\/b><\/h3>\n

Looking back, the past year has brought to light the importance of optionality in a broker\u2019s carrier network.\u00a0 Brokers with deep carrier networks have been able to adapt and thrive in today\u2019s market, while those with more limited networks have struggled to stay afloat.\u00a0 As brokers evaluate their pricing and procurement strategies for the next year, they need to focus on increasing their available carrier options and evaluate how technology can help with this goal.<\/span><\/p>\n

 <\/p>\n

For more information about the impact optionality has on a broker\u2019s business, check out our latest guide, \u201cThe Value of Options in a Tight Market.<\/a>\u201d<\/span><\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Chris Arredondo, co-founder and vice president of customer success, Cargo […]<\/p>\n","protected":false},"author":7,"featured_media":11623,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[7,1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/posts\/11611"}],"collection":[{"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/comments?post=11611"}],"version-history":[{"count":0,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/posts\/11611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/media\/11623"}],"wp:attachment":[{"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/media?parent=11611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/categories?post=11611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demos.pagifly.eu\/cargochief-backup\/wp-json\/wp\/v2\/tags?post=11611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}