How Benchmarking Data Can Unlock Hidden Savings

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There is plenty of value in simply understanding your current and captured price on a lane vs. what other shippers are paying.

However, benchmark rates can also be used to drive advanced real-time bid feedback that can include variables like benchmark rates, the lowest rate currently captured, and shipper target rates. You may think you are securing "good" rates, but often shippers are paying substantially more versus their competition on the same lane; "you don't know what you don't know".

Insight into benchmark rates is a worthwhile activity, and at Keelvar, we firmly believe it is the key to unlocking hidden potential and squeezing more savings out of your transportation operations. Our Sourcing Optimizer empowers you to harness the true value of benchmark data in ways that traditional spreadsheets and basic e-sourcing tools simply cannot match.

"You may think you are securing "good" rates, but often shippers are paying substantially more versus their competition on the same lane"

Here's how Keelvar can revolutionize your transportation sourcing:

• Unparalleled Insights: Keelvar's platform provides unparalleled insights into your current and captured prices on specific lanes compared to what other shippers are paying. This benchmark data is invaluable for helping you make data-driven decisions and challenging your own operating parameters. By knowing where you stand in relation to industry benchmarks, you can identify areas for introspective analysis. 
  
  This analysis can lead to strategies aimed at reducing your cost to serve, which in turn can help reduce your prices or, at the very least, validate your existing operating strategy and define your position in the market.
  

• Advanced Real-Time Bid Feedback: Sourcing Optimizer, Keelvar's flagship tool, offers advanced real-time bid feedback. It incorporates variables such as benchmark rates, the lowest rate currently captured, and your shipper target rates.
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• This powerful feedback can be presented through intuitive traffic light feedback or customized text "popups" on the carrier's bid sheet, giving you clear visibility into each bid's competitiveness.

"Powerful feedback can be presented through intuitive traffic light feedback or customized text popups"

• Outlier Bid Weeding: Keelvar's platform is designed not only to identify and weed out outlier bids that might artificially skew the feedback for other carriers but also to help you challenge your own operating parameters. This ensures that your bid evaluations remain fair, accurate, and reflective of actual market conditions. ‍
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• ‍Additionally, real-time bid feedback should be able to account for alternate bids, challenging you to think creatively about how to optimize your transportation costs. For example, it is not fair to compare an over-the-road rate with an intermodal rate on the same lane, but by understanding the benchmarks, you can identify when it's appropriate to explore these alternate bids.
  

• Results Tailored to Your Needs: Every business is unique, and that's why our optimization platform allows for carrier-specific feedback logic. You can tailor the tool to match your specific requirements, which includes the ability to challenge your own operating parameters. By doing so, you can optimize your results accordingly, reducing costs and improving competitiveness.

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The outcome of utilizing Sourcing Optimizer is evident - proven price compression that is impossible to achieve using traditional spreadsheets or basic e-sourcing tools. This is because sourcing optimization can find savings that are impossible to achieve using Excel or a basic e-sourcing solution—in many cases, millions of dollars.

To help you visualize the impact, take a look at our graph detailing our traffic light and text feedback system that segments organic savings versus Keelvar-generated savings, providing you with clear evidence of the added value we bring to the table: 

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Bid feedback is utilized by nearly all of Keelvar's customers with great success for their large strategic sourcing events.  Now customers are taking the proven success of bid feedback and incorporating it into their off cycle spot quotes executed by Keelvar's bots.  Spot quotes are notoriously associated with overpaying, and bid feedback can yield impressive hard dollar savings with these quick quotes via our bot and feedback combination.

"Sourcing optimization can find savings that are impossible to achieve using Excel or a basic e-sourcing solution—in many cases, millions of dollars"

Summary

In summary, Keelvar’s solution goes beyond simply capturing competitive rates; it empowers shippers to craft tangible and achievable scenarios that account for real-world complexities. While the platform excels at securing favorable rates, its true strength lies in its ability to incorporate a range of non-price considerations into the decision-making process.

These considerations encompass crucial factors such as carrier capacity, transit time, historical carrier performance, location-specific carrier preferences, and the preferred balance between using assets and brokers. By embracing these multifaceted aspects, Keelvar equips shippers with a comprehensive toolkit to design scenarios that align with their logistical goals and operational realities.

About the author: David Siedt is Senior Analyst and Pre-Sales Engineer at Keelvar.

Schedule a demo to discover how Keelvar can elevate your transportation sourcing strategy and unlock hidden savings within your operation this tender season.