Dynamic freight spend management: Optimizing costs, embracing agility (FreightWaves)

Image: Jim Allen/FreightWaves

The transportation industry has witnessed a rise in logistics costs primarily due to increased last-mile expenses and higher inventory carrying costs. McKinsey reports that cost management remains a significant challenge for both shippers and providers, exacerbated by supply chain disruptions and labor shortages. To address these challenges, companies are investing in freight spend management (FSM) solutions. Traditional FSM relied on fixed contracts and historical data, limiting adaptability to market changes. Dynamic FSM, powered by real-time data and AI, offers flexible optimization, better rate negotiation, and enhanced cost control. Challenges include seamless data exchange and mindset shifts among logistics teams and carriers. However, embracing dynamic FSM promises increased efficiency, cost control, and agility in navigating the modern logistics landscape, ultimately leading to competitive advantage and improved profitability through technology adoption and collaboration.

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