3 Reasons Shippers Struggle to Manage Their Allocation

Many shippers have found it’s nearly impossible to track and manage their allocation efficiently today. The reason they struggle to manage their allocation is often due to inadequate workflows and booking rules, along with relying on the outdated legacy systems they use to manage it.

In this article, we’ll highlight three reasons shippers struggle to manage their allocation and how harmonized contract performance and forecasting can enable optimized allocation.

1. Shippers Lack Interconnectivity Across Systems

Many problems in logistics derive from poor communication and sharing of information across systems. In today’s digital world, there is a system for everything and each function. That works fine in simple, one- or two-person interactions, but the typical shipment may have dozens of touchpoints, scores of data triggers, and an endless supply of information associated with each shipment. This amounts to an inability to correctly connect your POs, forecasts, and carrier allocation.

For example, if a carrier sends a large CSV file with estimated sailings and rolled container statuses once or twice per week, that data still requires re-entry into another system, which is done via Excel in many cases. That can drain hours of manual work from your team and add the risk of error.

As such, your forecasts are constantly playing catch-up with outdated data while today’s advanced systems make things operate more efficiently and in near-real-time.

2. Data Is Static & Unorganized

Managing data in Excel sounded great, 10 or 15 years ago. However, it’s simply inefficient, overwhelming, and risky in today’s age. By the time shippers and BCOs receive data, its value begins to decline. By the time they enter the data into spreadsheets and decide their forecasted demand, the data is too old to have a meaningful impact.

Most shippers forecast allocation on a four-week cycle. Yes, that cycle might be extended during high-activity periods, such as the holiday shipping season, but updating the data weekly leaves massive room for error in managing contracts. Furthermore, this manual method of managing data carries the labor cost of transcription and updating.

Still, what’s the other part of the process that breaks down? To answer that question, shippers need to hone in on process standardization.

3. Lack of Process Standardization Leads to Misallocated Freight

Today’s carriers have different contract terms, definitions for what things mean, and different penalty or cost structures. While service contracts help to set some standards, the simple reality is that carriers are separate entities, and their processes can vary widely. As a result, freight allocation problems can occur if the data provided by carriers is incompatible in its raw format or needs to be digitized before being organized within the shipper’s system.

There should be a process and path for handling any interaction and standardizing key metrics across your organization. Yes, each carrier may offer some notifications and event milestones, but without a single source of truth for managing those events, their value also declines. If the BCO doesn’t know what the notifications mean or how they’ll impact overall utilization per carrier, do they have any real value in the first place?

 

Optimize Freight Allocation with Data-Driven Contract Performance and Allocation Management at NYSHEX

Proper allocation within a singular resource eliminates the bottleneck of having one person manage allocation, and it continues to add value by ensuring your whole team can see how all contracts are performing, where they’re headed, and which lanes or alternatives are ideal for any given shipment.

Request a demo today to learn how allocation management and contract performance with NYSHEX can positively impact your ROI.

 

Hear from NYSHEX as they chat with Sarah Barnes-Humphrey and say goodbye to unreliable shipping.

 

About the Author

Let's Talk Supply Chain 3 Reasons Shippers Struggle to Manage Their Allocation 1Max has a diverse background with experience in sustainable hospitality, film, television, and several D2C brands. Growing up by the water, Max has always found an interest in the ocean and gets inspired by building communities, educating audiences, and discovering innovative technology that can help solve global inefficiencies.

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