Dive Brief:
- Though trucking deregulation occurred in 1980, a plethora of carriers have yet to upgrade the billing and freight rating methods established at that time, Supply Chain 247 reported Thursday.
- The introduction of Big Data and its corresponding use for analysis means that shippers can better measure appropriate costs and billing error levels, as well as hold carriers to their posted rate data. However, current demands for transparency are met with post-fact audits.
- As shippers react to sudden tariffs and rate changes (offset by contracting discounts), some may demand pre-contract transparency, driving a new revolution in the way shipper-carrier payments are handled.
Dive Insight:
While an overhaul of the billing system may seem promising and beneficiary, logistics is a slow-changing industry, particularly when it comes to technology. Think back to the attempted implementation of electronic logging devices, for example, which despite decades of availability and sporadic implementation are just about to become fully-adopted (although the case is still being challenged).
So carriers may not be due for a freight billing revolution any time soon, but that does not mean they shouldn't embrace it when possible. Companies pay significant amounts of money or expend valuable resources for invoice audits which, as Supply Chain 247 suggests, can be better managed by both shippers and carriers upfront. Negotiations to drive this change may not be easy, but it could be mutually beneficial.
A recent American Shipper contributed post, for example, notes that the most successful companies — the Rockefellers, Carnegies and Bezos of the world — rarely settle for the old way. Amazon thrives on innovation, as shown by its bid to deliver goods by plane, blimp, drones or even underground tunnels.
If supply chain management has become more popular over time, it is because companies are now treating the space as a competitive advantage. When we recall that last mile delivery is the final link in the chain, we understand why companies like Amazon and Alibaba strive so hard to try try any means possible to perfect their system.
Driving down external costs and improving internal synergies are key to business success, and logistics, many say, is ripe for disruption.
