Transport : coping with rising fares

Unprecedented upheaval for the world economy, the Covid-19 crisis resounds like a shock wave for many sectors, including the transport sector. Among its impacts is a strong instability in purchasing conditions. Focus on the tools available for better cost control.

Professionals in the sector are unanimous. The Covid-19 pandemic is having a major impact on the transport sector. Reduction in supply, disorganization of processes, inability for a certain number of players to operate under the usual conditions and tension on demand undoubtedly have an impact on transport prices.

Transport tariffs disorganized by the crisis

Faced with the crisis, many carriers no longer wish to apply the fares negotiated before the crisis. More and more operations are switching to spot quotes. Transactions are thus negotiated on a day-to-day basis. This creates volatility in the market and a potential increase in the fares charged. For the shipper, this phenomenon heralds a twofold challenge. Those of determining the right price to pay and securing the availability of vehicles. For the carrier, the usual networks are unbalanced, resulting in a lack of regularity in return flows. Faced with these constraints, they tend to terminate their contracts or leave the negotiated tariff conditions.

Finally, in addition to these elements, there are other strong cyclical factors. For while deconfinement has led to a collapse in demand, it may have other effects :

• Displacement of carriers
• increasing scarcity
• a moving diesel index

Factors that also influence more frequent renegotiation of tariffs.

Thus, without dedicated tools and management systems, price instability increases, creating additional difficulties for all players in the supply chain in times that are already highly complex. And this high volatility is likely to become the norm in the coming months. It is therefore a real challenge to keep costs under control. To achieve this, a digital tool is more necessary than ever.

Digital for better control of transport costs

To manage its transport flows in an unstable environment, communication is essential. More difficult because of the increase in teleworking, it is however easily established through a collaborative platform for transport digitisation or transport software such as TMS.

Automating its transport, interacting in real time with its partners, positioning alerts, scheduling automatic reminders in terms of availability and prices are among the main assets for controlling its transport operations. The exchange of information between principals and transporters is thus digitised and allows a fast and secure dialogue, particularly on applied rates. Thus, in the event of a negative response from a carrier for a dedicated operation, the shipper is able to react as quickly as possible and restart his process in order to quickly find an alternative.

A tool such as DDS Logistics’ TMS DDS Shipper makes it easier to communicate with carriers throughout the rate validation process and beyond, from the creation of the pre-invoice to its control. As a measurement and decision-making tool, it allows daily, via tariff simulation tools, to clearly visualise the impact on changes in activities for better control of the budget. The TMS thus provides concrete answers in the ability to make comparisons between the different offers proposed.

Transport digitalization tools for supply chain agility

Because the supply chain is complex, the tools to master it must be simple. Faced with the uncertainty of the coming times and the crisis suffered by many players in the sector, it is now necessary to show resilience and agility in order to bounce back tomorrow. Daily management of the transport chain, simplification of processes and digitalisation of the latter are essential to achieve this.

Digitizing the management of your transport means controlling costs. Today, tools such as the Join2ship platform, the Shipper Light software or the DDS Shipper TMS, DDS Logistics offers the ability to quickly implement initial solutions to control transport, both operationally and financially.