The logistic industry underwent many ups and downs, battered by pandemic-induced delays, lockdowns, and resource shortages. As a result, there were several shifts in business-as-usual to get stocks out as soon as possible and adjust to the new normal. Spot bidding, for instance, gained traction as many shippers tried to catch up with the lost time immediately after stringent lockdown rules were relaxed for a bit. As per reports, spot-market load postings have been up 176 percent.
What was supposed to be a unique opportunity for freight brokers to increase revenue with spot bidding became a major roadblock for many. Hence, shippers and freight brokers increasingly turned to Automated Spot Bidding to save their day.
What is Spot Bidding, and Why Automated Spot Bidding is Required?
A spot bid sale immediately follows items or goods offered for sale. Buyers bid on the offered items examined, rejected, or accepted on the spot to close the deal.
For freight brokers, nearly 80-90% of demand is generated through traditional EDI channels or direct customer calls. The freight business runs on a good relationship between freighters and customers. Hence, the bulk orders coming from these fragmented channels consume most of the sales teams’ bandwidth in fulfilling these orders. On the other hand, leads posted directly on consumer portals have a minimal conversion rate; yet 100% of them are spot loads garnering higher revenue and profit potential.
Sadly, these orders get neglected most of the time.
Automated Spot Bidding has the potential to scan millions of loads shared on customer portals, place competitive bids and increase revenues on untapped spot market loads without human intervention.
Challenges in Spot Bidding
From a freight broker standpoint, spot bidding is complex and time-intensive, involving too many human touchpoints. Hence, the entire process is rift with errors, compounding into thousands of other errors.
A few challenges and issues with legacy spot bidding are elaborated below:
Labour and time-intensive: The legacy spot bidding is manual, with spot bids on portals needing constant human monitoring and placing of orders manually. Freight brokers have to continuously monitor multiple shipper websites, figure out the characteristics of a load when it is posted, determine if they want to bid on it, create a competitive quote, and then bid on the shipper’s portal.
The process is rife with human errors: Handling bulk orders in a short window of time leave room for errors. In addition, due to heavy bandwidth, most granular nuances remain unresolved, thereby reflecting poorly on profit-loss statements.
Little scope for conversion tracking: In the absence of data, tracking the loads across portals and checking for conversions is challenging.
Increase operational costs: Too much dependency on humans add to operational costs for freight brokers and shippers. Moreover, ramping up the process with an additional workforce translate into more cost and higher subscription charges on multiple logins.
Volatile and dynamic market: With daily fluctuations in the demand-supply chain, businesses struggle to adjust to the changes intelligently.
Direct client conversations: Since most of the business is run on a word-of-mouth relationship basis, many freight brokers prefer direct client conversations over spot bidding. But unfortunately, this prevents them from getting the right price. Hence, revenue loss is a constant reality the freighters and shippers have to deal with.
Maximize the Potential of Automated Spot Bidding
The freight brokers, shippers, and bidders thus require an automated bidding solution as a new activated revenue generation engine. Simple Robotic Process Automation can efficiently address all the above challenges by keeping humans out of the loop. This approach will increase overall revenue, bid won rates, and gross margins.
An automated spot bidding system uses bots to scan millions of loads across customer portals, qualify them based on custom rules and goals, query the pricing engine or tariff to generate a good quote, and place competitive bids without human intervention.
Further, with a conversion rate of less than 10%, the bots can easily garner hundreds of millions of dollars without increasing overheads.
What is Automated Spot Bidding, and How does it Work?
Automated Spot Bidding takes the heavy lifting and guesswork from the human workforce. It sets bids automatically based on historical data to meet your performance goals and increase the likelihood of getting conversions.
In an automated spot bidding process, a bot will:
Gearing up for the Future with Automation
The global pandemic was eye-opening for businesses, especially freight brokers and shippers. Finding more use cases for automation has become imperative, as most competitors today are moving to digital freight brokerage solutions. The future of logistics can be streamlined, hyper-efficient, and connected by leveraging the power of automation. Automated spot bidding is probably the first step in that direction.