Are shippers increasing their freight procurement budgets?

Surveying 300 senior logistics decision-makers in manufacturing, retail and distribution with annual freight spend of more than US$100mn, Sleek Technologies has taken a deep dive into the pressing freight procurement issues, concerns, and trends associated with COVID-19.

“COVID-19 has fundamentally changed the way the entire logistics industry operates – particularly when it comes to freight procurement,” said Mike Nervick, CEO and Co-Founder of Sleek Technologies.

“From sky-high rejection rates and costs to navigating the increasingly murky spot market, the pandemic and supply chain crisis has been one of the most disruptive periods in the history of freight procurement. This research helps to illuminate the issues and trends that some of today’s biggest shippers are keeping in mind as we try to work through the pandemic in 2022.”

Understanding freight procurement budgets among shippers

According to Sleek Technologies’ research, 97% of shippers report their plans to increase freight procurement budgets in response to COVID-19. The hopes for those increasing their budgets are to battery manage capacity, increase agility, bolster cost management, and deliver better results overall.

Specifically, 52% are expected to increase their freight procurement budget by 25%.

“These findings illustrate just how competitive the freight procurement space has become over the last 18-24 months. From boosting technology to trying to absorb higher costs, freight procurement professionals are having to ramp up their budgets to beat out competitors and meet customer expectations,” said Nervick.

Other findings from Sleek Technologies include investments made in freight procurement upgrades since the start of the pandemic. In total 96% have invested in new technologies and/or strategies to help boost freight procurement performance.

Of those, 95% stated that their freight procurement operations have ‘significantly improved’ or ‘somewhat improved’ since the start of the pandemic. 

“For decades, freight procurement has flown under the C-suite radar, and has been renowned for sticking with the status quo when it comes to process,” said Jaimie Kowalski, VP Marketing at Sleek Technologies. 

“And with COVID-19 spurring on massive digital transformation efforts and investment, shippers are finally modernising antiquated operations and freight procurement teams are reaping the benefits.”

High priorities for freight procurement

Elsewhere in the report, Sleek Technologies discovered that 66% of respondents are seeing automation as a ‘high priority’ for their organisation, with 31% reporting it as a ‘medium priority'. 

“It’s amazing to see how many shippers still use static processes to manage their transportation needs and routing guides,” said George Belle, Head of Product Engineering at Sleek Technologies. 

“As unprecedented challenges become normal, shippers will need to ramp up automation efforts in order to mitigate rising truckload costs, and improve upon OTD to make the most of every dollar in their transportation budget.”

To read the full report from Sleek Technologies, click here.