Freight procurement: a new playbook for shippers
Freight procurement is moving faster than old-school methods can handle. Annual RFPs and static contracts are too rigid for a market that is now defined by sudden rate swings, supply chain shocks, and global disruption. Flexible strategies like dynamic sourcing, mini-bids, and real-time freight data tools can help you keep trucks moving and your costs under control— no matter how the market shifts.
Freight procurement is due for a reset
The world of freight procurement is changing, and changing fast. The past few years have shown significant volatility in market conditions and rates, and old pen-and-paper approaches to procurement can no longer keep up. The go-to processes of annual freight RFPs and static contracts are now falling short, competitive rates can quickly become outdated, and routing guides break down when market conditions shift.
With increased globalization, supply chain disruptions, and digital commerce driving higher consumer expectations, data-driven approaches are no longer just desirable, but necessary. With a flexible freight procurement strategy, you can keep your business moving as fast as the market does.
In this article, we’ll walk you through some of the key market trends changing the procurement process, why old models don’t work, and ways to help make freight procurement easier. With the right tools to support your procurement process, you can turn market volatility into a business advantage and stay ahead of the competition.
What’s changed: key freight market trends that are changing procurement
There’s no question the freight market is moving quickly. There are five major trends behind recent market changes, each of which can make it difficult to keep up if you’re not using a data-driven approach. Let’s take a look.
1. Volatility between spot and contract markets
The balance between spot and contract rates isn’t always predictable, as we saw during the COVID-19 pandemic and the price swings that followed. One month, contract rates might seem stable. The next, a spike in spot rates could cause carriers to reject tenders and put your routing guide at risk. Without real-time data, you risk overcommitting to contracts that no longer reflect market conditions—or scrambling to secure last-minute capacity at higher spot rates.
2. Shifts in capacity and carrier behavior
Volatility in the market also affects carriers, and they end up moving their assets around more frequently. This means it’s no longer predictable which lanes will be well-covered and which will be under-served. If you’re not adjusting your freight procurement strategy to follow these shifts, you could end up with rejections or inflated costs.
3. Growing pressure to cut costs and improve service
Shippers today are under pressure to deliver both competitive pricing and reliable service. That balance requires smarter procurement strategies and real-time visibility into the market. Instead, they want fast, reliable shipping, high-quality service, and low costs. You can no longer just provide one or the other. This means you need to adopt a smart, efficient freight procurement process that helps you meet all these goals.
4. Tech advancements making dynamic procurement possible
Static spreadsheets and time-consuming RFP cycles just don’t cut it anymore. With tech advancements in real-time freight data analysis, you can get instant market insights, streamline parts of your procurement process, and respond faster to market changes. This makes dynamic procurement possible, and is increasingly becoming the name of the game.
5. The increasing role of data in strategic sourcing
Real-time analytics and predictive tools have become essential. The smartest shippers are using dynamic strategies like mini-bids and lane rebalancing, backed by current rate and capacity data, to stay agile in a volatile market.
This shift isn’t just a trend—it’s a competitive advantage. If you’re not evolving your approach, chances are your competitors already are.
Now let’s take a look at some of the issues with legacy procurement models (in case you’re not convinced yet).
The limitations of legacy procurement models
You might be tempted to hang on to legacy models, but freight procurement processes are breaking down in the face of market movements and more unstable conditions. By the time you lock in rates through an annual RFP, the market has likely shifted. Routing guides, designed to help you connect freight with preferred carriers, often fail when capacity for a carrier shifts. These legacy models can leave you missing out on revenue with outdated rates, scrambling for last-minute coverage, or facing delays with carrier onboarding when you really just need to keep moving.
Relying too heavily on old approaches puts both your service levels and cost control at risk. Inflexibility in long procurement processes can leave you exposed when the market moves, and without real-time insights, you’re making decisions based on last quarter’s realities, not today’s.
The new playbook: modern freight procurement strategies that work
This freight procurement playbook is focused on adaptability, real-time data, and continuously-adjusting alignment with the market. Let’s take a look at three of the most effective strategies that you can adopt for freight procurement going forward.
Dynamic procurement
Dynamic procurement flips the old freight procurement approach on its head. Instead of setting rates months in advance, you use real-time data to make decisions. This flexibility keeps your rates in line with shifts in capacity and accompanying changes in pricing.
When markets tighten or demand increases unexpectedly, a dynamic freight procurement strategy allows you to quickly adjust. This reduces the likelihood of tender rejections, and helps you to find the right carriers faster. Using a dynamic approach is particularly good for unpredictable lanes, shipments with short lead times, or freight that requires a high level of service.
By moving in line with the market, you won’t be caught locked into set prices or contracts that end up costing your business.
Mini-bids
Mini-bids are another key approach that you can take to keep your procurement more flexible. They are somewhere in between full RFPs and day-to-day spot market moves. With mini-bid freight contracts, you focus on specific lanes or challenges. For example, if a lane is underperforming or the market shifts part-way through a contract, you can run a min-bid to update rates, try out new carriers, or increase capacity where you need it.
Good mini-bid freight proposals are made quickly and clearly: with a clear idea of your goals, you can run a short, focused process based on reliable, up-to-date data and analytics. This new approach is built on insights into market rates, lane-specific capacity, and thorough carrier vetting. This way, your procurement can stay more agile and flexible than with longer, full-scale RFPs, and can take a more targeted approach with mini-bids.
Real-time market monitoring
In today’s fast-moving market, successful freight procurement strategy relies on insight into rate and capacity conditions. Freight market intelligence platforms like DAT iQ allow you to monitor trends, forecast shifts, and make data-backed decisions faster and with more confidence.
With high-quality network analytics platforms, you can:
- Track past, present, and projected rate and capacity trends
- Pinpoint regional pressure points and emerging disruptions
- Adjust your procurement strategy dynamically—from mini-bids to broader network rebalancing
The result? A procurement process that’s more agile, more accurate, and better aligned to what the market is doing right now.
Building a flexible freight procurement process
Now let’s take a look at how you can build this flexibility into your freight procurement process to design cost-efficient and reliable networks. We’ve gone through why a more adaptable approach helps you respond to market shifts, secure reliable capacity, and keep costs under control. But getting there means changing your internal processes, aligning your teams, adopting new technology, and integrating platforms.
Rethink your internal workflows and decision-making timelines
First, you need to make sure you have updated approval chains and timelines within your business. For example, make sure your team has the permissions and empowerment they need, to make quick decisions without multiple approvals. Ensure you keep your executive team informed and in alignment with your game plan.
By creating a faster, more responsive internal workflow, you’re able to avoid risks and take advantage of opportunities as they come up.
Cross-functional collaboration: procurement, logistics, and finance alignment
Flexible procurement works best when all your internal teams are in sync, and your team must be prepared for changes in process. Make sure you have regular check-ins between your procurement, logistics, and finance employees. Share real-time data across departments, so that everyone can benefit from the same insights.
The role of technology in improving speed, visibility, and accuracy
Modern technology helps you move to a more strategic approach, and using smart tools is a critical part of creating a flexible freight procurement strategy.
When you use data analytics tools alongside your procurement systems, (and integrate them well) you can take advantage of real, reliable rate data and carrier performance insights. You can then fine-tune your mini-bid freight procurement to address problematic lanes, reduce costs and improve your service levels.
How to evaluate success: performance benchmarks and continuous improvement
If your freight procurement process only works in the short term, it isn’t a useful one. For an effective, future-proofed approach, make sure you have clear, actionable performance benchmarks, a focus on continuous improvement, and take advantage of analytics data to gain more insights.
A good benchmarking tool can help you compare your operations against industry standards and can identify areas to enhance how your business moves.
Define the right metrics for your business
Establishing the metrics that matter can help you measure the effectiveness of your freight procurement strategy. This includes tracking cost performance and market rates, your carrier compliance, and your service levels. Gather data on freight service levels, i.e. how often your freight is delivered on time, and the frequency of delays. Make sure you also keep track of market demand and pricing, as well as how quickly you responded to these things in the past. Regularly reviewing these metrics and benchmarking against other shippers helps you spot trends early and course-correct before small issues become bigger problems.
Embrace continuous improvement
Another important aspect of good performance is to set up a process for continuous improvement. Part of this includes holding, for example, half-yearly or quarterly procurement reviews to fine-tune your process. Keep up to date with market data using analytics technology, so you’re always working with the latest insights.
Finally, make sure you’re not just collecting data, but actually using it to drive decision-making. With the right data and mindset, your freight procurement strategy becomes a powerful tool for long-term success.
Freight procurement is about agility, not just cost
The traditional freight procurement models, including annual RFPs, static routing guides, and long-term contracts just can’t keep up with today’s volatile market.
If you embrace smarter, more flexible shipper approaches to procurement, including analytics platforms, dynamic sourcing, mini-bids, and real-time market monitoring, you can keep up with changes and stay ahead of the competition.
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FAQs
A few things you might be asking yourself
The most effective modern freight procurement strategy today is flexible and diversified. With constant shifts in the freight market, you need to move away from traditional methods like annual RFPs and static routing guides. Instead, focus on dynamic procurement and data-driven decisions supported by data providers like DAT. iQ RateView gives you visibility into current market rates, while iQ Benchmark helps you evaluate your performance against the market and inform procurement decisions with historical and contract rate intelligence.
Mini-bids are a more agile, fine-tuned alternative to traditional RFPs. Traditional RFPs usually take a year or more to complete, while mini-bids are much faster. Mini-bids are focused on specific lanes, capacity needs, and market shifts, and help to mitigate mid-contract adjustments, short-term spikes, and underperforming lanes. They are quicker and provide a more targeted way to adjust rates or carriers in response to changing conditions.
Real-time data is crucial for informed decision-making in modern freight procurement. You can use it to help you avoid delays, mitigate risks, and take advantage of opportunities when they come up.
DAT iQ provides real-time market intelligence and data analytics to help you make better procurement decisions. Data-driven tools like these allow you to respond quickly to changes, and take a more dynamic approach. DAT iQ helps streamline mini-bid processes, optimize carrier selection, and forecast future rate movements, all of which lead to more accurate and efficient procurement decisions.
The biggest challenges in freight procurement today include dealing with market volatility and managing rising costs. Unpredictable shifts in rates, spot market swings, as well as carrier capacity fluctuations, can disrupt supply chains. Many shippers feel overwhelmed by these shifts. Traditional procurement models can’t usually address these issues effectively, which results in inefficiencies and higher costs. With flexible, data-driven approaches, many of these challenges can be dealt with in a better, more cost-effective and strategic way.
Take advantage of a dynamic, modern procurement strategy with DAT iQ
Unlock smarter sourcing decisions with DAT iQ to take advantage of mini-bids and dynamic procurement benefits. Get real-time data, analytics, and forecasts to build your flexible procurement strategy today.
Explore DAT iQ today to learn how DAT can help your shipper operations get to the next level.
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