Two-part series: Developing a Story with Data to Optimize LTL Decision-Making and the best practices to simplify the LTL RFP process

It shouldn’t surprise anyone that the supply chain and logistics industry churns through mountains of data to move products from the point of origin to the final destination. According to the American Trucking Association, there were 11.46 billion tons of freight transported by trucks in 2022 and you can imagine the volume of data generated by those hauls. To wrap their arms around big data and derive meaning from it, supply chain professionals are increasingly turning to business analytics solutions.

In the first of our November 2023 Online Education Series on LTL business analytics, SMC³’s Joe Tillman, manager of education programs, dove into the topic with industry expert Abby Mayer, group manager of transportation management at Ryder. As expected, artificial intelligence (AI) and machine learning was featured prominently in the discussion. Mayer likened the perception around AI to an old Staples commercial that advertised pushing the easy button.

“There are many opportunities with AI and machine learning in our industry, but it’s not ‘push the button and all your problems are solved’,” said Mayer. “Different companies are at different points in learning how to integrate these new technologies into their organizations.”

Ryder’s Automation Journey

Mayer noted that data security and confidentiality are challenges that need to be addressed before the industry can more fully integrate data and really leverage business analytics. But there has been progress. She said that her analysts used to spend up to six hours a day manually building tariffs and entering data from one screen to another. However, the process is now automated, freeing up analysts to look at data, understand trends, and identify opportunities.

Ryder also used to take the first full week of the month analyzing and summarizing the activity from the previous month. The company has automated that process and it can pull that data much faster and perform data cleansing and validation to create the monthly summary, Mayer noted.

“We get that data now on the first day of the month rather than a week later,” said Mayer. “That’s a huge time savings.”

What To Do with Data?

Automating and speeding up the process of collecting data is just the first step. Once you have the data, what will you do with it? asked Tillman. Mayer noted that this next step is the one that often gets skipped over.

Mayer recommends really looking at the data to determine if it makes sense. Look for trends and make sure the data is telling an accurate story. When analyzing customer data, it’s especially important to dig into the data they provide so you know you have the correct information to price their freight. If the data is wrong, Mayer said it can be a painful conversation with the customer. “But I’d rather have that happen on day five than day fifty or day five hundred.”

Moving Beyond Anecdotes

There’s definitely an evolution to trusting data in the supply chain industry that has long relied on anecdotal stories, Mayer said. Now that data can reveal a truer story, the industry needs to trust it.

“But that can be a double-edged sword because it’s very easy to lose that trust if you don’t have the right data or if you’re misrepresenting what the data is saying,” said Mayer. “You have to be cognizant of the data quality and what you’re doing to it.”

Sharing the Data Story with Customers

Mayer emphasized the need for a consistent message when sharing data and results with customers. She pointed to a past role at a telecom company where the organization’s leaders believed it had a problem with slow shipping of cell phone equipment. But digging into the data told a different story.

“The real problem was the dwell time that the equipment sat waiting for pickup by the final contractor was exorbitantly long,” said Mayer. “We could keep shipping out as much product three times faster, but we’re not actually solving the problem if there is a delay in the components getting picked up.”  

Hiring in the Age of Big Data

Talent shortages besiege the supply chain industry these days. Finding analysts to dig into the data and reveal a true story can be challenging. Plus, they need to be comfortable with data and curious.

“There’s a focus within universities and education on data scientists,” said Mayer. “But you can’t just be a data person. You have to be able to speak to the data, tell the story of the data and present that to different stakeholders.”

Mayer emphasized the need to have both data skills and people-facing soft skills to build consensus and get buy-in for the data story. Learn more here.

The amount of data generated by modern LTL technology and tools has revolutionized the bidding process. On one hand, this data explosion enables a greater level of automation and granularity. On the other hand, the fundamental complexity of LTL, new technology and more data can make the already difficult tasks of making and analyzing formal bids feel even more complicated.

In session two of our recent webinar series, the goal was to simplify and demystify the LTL RFP process by providing attendees with best practices they could put to work as they automate, facilitate, and manage bids between carriers and shippers. Our panel of experts included a diversity of perspectives on this issue:

• Karl Manrodt, Professor of Logistics at Georgia College
• Ermias Hailu, Director of Procurement for The Home Depot
• Justin Springer, Director of Business Development at SMC³

Be Disciplined on Pricing

When it comes to pricing, no one––neither shippers nor carriers––wants to live in a constant state of chaos.

“I don’t think anyone in the industry wants for it to be the Wild West from a pricing perspective,” Springer says. “It creates instability. From a carrier perspective, having discipline around pricing is key for long-term success. It not only benefits them, but also the parties that they serve.”

Factor In Market Volatility

If the past few years have taught us anything, it’s to expect the unexpected. Recent economic volatility has underscored an essential truth about LTL contracts and RFPs: They must consider the unpredictability of industry and macroeconomic trends.

“We’re seeing a reversion back to shorter terms,” Hailu says. “Traditionally, we’d see longer contract periods, but with all the uncertainty that’s going on, carriers are starting to hedge a bit on risk. They don’t know where the economy is going and want to act accordingly.”

Springer noted that supply chain issues are another common source of volatility:

“During the height of COVID, we’d see a lot of capacity issues, supply chain disruptions, and so on, and that led to a lot of shippers but out bids that were more constrained by, say, a specific region where capacity was an issue.”

Longer-term bids clearly have their benefits––they build a certain amount of certainty into the supply chain. But those longer-term benefits, and the supply chain stability they help to generate, are dependent on the market. That means bids must be too.

Strengthen Your Relationships, So You Can Lead On Them When It Counts

“We know we don’t want a disruptor coming our way and undermining our business,” Hailu says, “and that means we need to maintain our relationships with our carriers. We have to continue to find ways to reduce our costs to them so we can be a shipper of choice.”

How does he reduce costs?

“Pay close attention to handling characteristics. Make sure you’re not holding up drivers and equipment. Those are the big levers you can pull when it comes to building relationships with carriers and putting yourself in a better position.”

Springer points out that another key part of this relationship-building is good communication.

“Modern tools mean that carriers have more visibility than ever before as to where their equipment is, if their drivers are being detained, etcetera. All of those things factor into future negotiations, so it’s best to be hyper-transparent and keep lines of communication open at all times in order to build trust. Set expectations up front to avoid more difficult conversations down the road.”

Use Data To Your Advantage

The level of data that carriers have at their fingertips is dramatically higher than it was just 20 years ago. This translates to a lot more visibility into the entire operational network, and this visibility has allowed for greater complexity and a higher level of analysis.

“Carriers have an opportunity to spend much less time on outdated tools like Excel or pen and paper, and they can spend more time being strategic with the rates they offer,” Springer says. “Obviously, carriers aren’t looking to gouge anyone, but they want to be competitive in the lanes that they know they can service well, and higher levels of data allow for that higher level of competition.”

“It’s really beneficial from a pricing perspective for both parties,” he continues. “I don’t think anybody wants to go back to the negotiating table for two or three months after closing a bid. Having clear data on both sides helps avoid that, which makes for better relationships and partnerships in the long term.”

Looking for more information on RFPs and contracts? Check out our online learning center and expand your skillset!