CH Robinson: shippers will pay more for cargo in 2021

CH Robinson: shippers will pay more for cargo in 2021

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Gregor Gowans

Gregor Gowans

Journalist Trans.INFO


CH Robinson: shippers will pay more for cargo in 2021

The CEO of multimodal transportation and third-party logistics corporation Ch Robinson has said he expects shippers to pay more for freight in 2021.

Bob Biesterfeld, Ch Robinson’s CEO and President, made the observation on the same day his company unveiled a new procurement tool named ‚Procure IQ’.

According to Biesterfeld, a driver shortage has generated a shortfall in truck capacity at the same point retailers are stocking up again and demand for freight is rising. Air-freight is also still restricted, despite a number of airlines getting into the cargo business. Once you weigh in those factors, as well as the huge logistical challenges in delivering vaccines in 2021, it is not surprising that the CH Robinson chief expects prices to rise:

“There’s going to be demand coming online that I believe will continue to drive market tightness and pricing inflation. On top of that, at some point there will be the need for distribution of a vaccine like we’ve never seen before, and that will clearly create some logistics bottlenecks as well.”

Of course, there is already evidence of rates going up in the industry. As we reported earlier this week, DHL will increase their rates in a number of different territories including Australia, New Zealand and India. FedEx have also announced rate rises for deliveries across North America.

Meanwhile, CH Robinson say their new ‚Procure IQ’ system leverages data from its huge shipper and carrier community in order to disrupt the „decades-old tradition” and „one-size-fits-all” annual bidding approach to buying freight transportation.

In order to achieve this goal, the application shall help large truckload shippers decide on whether to select an annual bidding process or alternative options on particular lanes:

Designed for large shippers of U.S. truckload freight, this free tool disrupts the traditional transportation-buying process by providing an opportunity to analyze each specific freight lane through a comparative pricing, volume and service analysis rather than solely purchasing transportation lanes in bulk during an annual bidding process. It allows a shipper to discover the most efficient way to buy with the ability to analyze each individual lane. For example, it is often more cost-effective and reliable to purchase less frequently traveled lanes with real-time pricing engines, while other more frequently traveled lanes are best purchased through a proactive contract in order to optimize savings and service.

To Procure IQ application works by inputting customer shipping needs and data, such as lane origin and destination and volume estimates. This is then integrated with C.H. Robinson’s vast dataset, which is filled with billions of transactions from a community of 200,000 unique carriers and shippers and 18 million annual shipments. Using this information, along with predictive analytics and artificial intelligence, the application aims to provide shippers with a custom visual analysis including recommendations for optimal procurement and capacity strategies for each shipment.

CH Robinson claim that Procure IQ has already helped large shippers learn that savings or reliability improvements could be yielded on up to 60% of their routes.

The corporation decided to make the application after a survey revealed that more than 50% of their largest customers were looking for tools in the areas of predictive analytics, reporting and dashboard development.

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