Getting a quote from each of your carriers for every shipment may sound time consuming, but with the right TMS you can see all of your options and only have to enter the data one time. But first, let’s talk about why routing guides are now imprecise, insufficient and inaccurate.
State to State Is Not Enough Information
Most routing guides operate off an assumption that one carrier is the best call for all moves from one state to another. This just is not the case. If I am shipping something to Laredo, TX the cost will likely vary greatly with the same carrier if I am shipping instead to Dallas, TX.
You are missing out on opportunities with regional carriers, and just making too broad of an assumption. The typical process for developing a routing guide is to run a typical single scenario for your shipping department against the most common lanes in the last year and compare that same typical singular use-case to other carriers. For example, out of the 100 lanes in GA, for 35% of that one scenario, Carrier 1 was the least expensive, Carrier 2 won 15%, and Carriers 3, 4, 5, & 6 split the rest. The routing guide will say that all the freight going to GA will now use Carrier 1. With this routing guide you just made the decision to pay more than necessary on 65% of every lane in the state of Georgia.
In most cases, you likely have a yearly RFP with your carriers. As soon as this occurs, your routing guide will be outdated, and that typical process we talked about above? You have to start it all over again! And if you don’t, you’re leaving even more money on the table than you likely already are just by using a routing guide in the first place.
More and more carriers are starting to offer dynamic pricing. Dynamic pricing is a time-based pricing strategy where the carrier can set real-time pricing based on demand and availability in that particular lane. A routing guide cannot reflect this real time change in pricing. An API based connection is the only way to ensure you see live rates on every single quote.
No visibility to your carriers
When you are operating using a routing guide, you’re not giving your carriers opportunities to be competitive on other lanes. They only see the shipments you directly book based on your routing guide. If you use a system like Freightview, they see every single quote, and will know if they aren’t winning on those lanes. This can incentivize your carriers to become more competitive in a lane they want to compete for. Quoting and booking on a platform like Freightview also allows you to pull meaningful reports containing your raw data that you can share with your carriers when it comes time to negotiate your costs.
Okay-- you’ve convinced me-- what do I do now?
Implementing a transportation management system is likely the best way to move away from your routing guide and solve all the problems addressed above. You can find all the information you need on transportation management systems in this inclusive guide.