Shipping costs most certainly are an integral and significant part of the supply chain expense. To run your business successfully, you must try and reduce these costs without having to compromise with the service you get from the stakeholders involved.
Undoubtedly, being in control of how much you pay for your shipments and having the right tools to negotiate better is crucial to your bottom line. While the traditional approach to negotiating rates does very little in terms of managing uncertainty and ensuring competitive rates despite circumstances, today there are adequate solutions to solve the problem.
The simplest way to ensure that you’re procuring the best possible freight rates is to automate negotiations, benchmark prices and make data-driven decisions; and it is here that technology steps in.
GoComet’s cloud-based RFQ management module fully automates your negotiation process and helps you drive significant cost savings with its unique compounded negotiation system.
Here is how GoComet’s digital automation technology solves the problems that have plagued the traditional freight rate negotiation process:
- Fewer negotiations, the lesser scope for reducing rates:
Negotiating rates via email or calls by design limit the total number of negotiations that happen and thus, adversely affects the rates you secure. For instance, you may have a pool of six vendors who share their quotations with you. You may then select the lowest quoting 2-3 vendors and try to negotiate the price with them.
In quite a few cases, you may not have the luxury of time and simply end up setting a target rate. You may call up a vendor or two and award the shipment to the vendor offering rates that are closest to the target price set by you. Perhaps the remaining 4-5 vendors would have been able to offer you a better price but you would never know as you didn’t make the call.
Now let’s look at how automating the process can be a game-changer and make your vendors compete with each other to offer you the best deal. With GoComet’s RFQ management module, you can create enquiries within minutes and share them with an unlimited number of vendors simultaneously.
From this point onwards all you do is sit back and relax. Once your vendors submit their quotes, they’ll see their rank as compared to their competitors. Every time a quotation with reduced prices is submitted, the system will auto-notify all the vendors and display their updated rank.
Through vendors’ efforts to secure the first rank and win business, the rate you pay will continue to shrink till the end of the bidding process.
What potentially happens, in this case, is that every vendor is negotiating with every other vendor and dramatically increasing the total number of negotiations happening. The system not only ensures a level playing field for all your vendors but also ensures that you secure the best possible rates each time.
- Lack of deal transparency
With the traditional negotiation system, keeping track of whether a shipment was awarded on merit can be quite a hassle.
GoComet’s data logs digitally record every single interaction in the bidding and selection process. This helps ensure that business is awarded purely on merit. In case business is not awarded to the lowest quoting vendor, the system makes it mandatory to leave a remark justifying the choice.
Not only does this ensure transparency, but also dramatically reduces the time taken to conduct internal and external audits.
- Inability to stay abreast with current market rates
Before you initiate the negotiation process, you must be aware of the latest market freight rates. There are several rate indexes available in the market today that prevent you from paying more than what’s needed by offering you benchmarked rates for the route of your choice.
When you create enquiries and negotiate on GoComet’s platform, GoComet Freight Index (GFI) allows you to benchmark freight rates for all your shipments on a unified dashboard within seconds.
To benchmark rates, the system considers the top-rated and lowest quoting vendors on each route from over 25,000 quotes that are submitted by more than 4,000 vendors from all across the globe on the module. By leveraging this tool, you can be sure that you are paying the right rate for each shipment.
- Lack of data analytics
Data-driven supply chain management is a norm today. However, it’s close to impossible to convert data into actionable insights without the right tools at hand. Overlooking the importance of data analytics immediately puts you in a position of major disadvantage.
However, consolidating data manually and drawing insights from it can be time-consuming, labour intensive and may not assure the desired results either.
GoComet solves this problem by automatically capturing and recording several data metrics such as performance of the carriers you partner with, performance of your vendors across shipping lines over a period of time for various business units and geographies, etc.
By using proprietary algorithms, the system converts this data into actionable insights and enables you to effortlessly make data-driven decisions.
An innovative solution to all your problems
While enjoying a transparent and efficient bidding process, with GoComet you can engage with unlimited vendors, leverage the recursive rate reduction system and get the best deals at the best price every single time.
To learn more about how GoComet can help you optimise your supply chain management and drive double-digit cost savings, reach us here.