Maximize Freight Efficiency: How Allocation Management Transforms Carrier Agreements into Savings
Freight managers that negotiate agreements with multiple carriers in advance have an advantage over others seeking capacity for their cargo through spot quotes. However, they often do not use their advantage to the fullest because they track these agreements and their shipping volume in old-school-logistics ways: complex spreadsheets, email ping-pongs, or even pen and paper. These methods are cumbersome and inefficient because they obscure data that could unlock savings and ensure bookings for freight transport. That is where Allocation Management comes in. Shippers upload their tenders, regardless of the format, and visualize how much cargo they have sent with different carriers, at different times, and in different directions – allowing them to take advantage of unfulfilled availability for their remaining shipments.
The Benefits of Allocation Management
Allocation Management supports shippers and freight forwarders in making sure that their cargo is sent when/where they want and reducing rolled shipments. This means paying lower rates and avoiding spot market dependency too. In particular, the benefits of Allocation Management derive from improved monitoring and better relationships with transport partners.
Total Allocation Transparency
Acquiring rates in advance only serves to benefit shippers that can keep an account of their agreements, so total visibility from Allocation Management means visualizing allocations and bookings by time, carrier, service string, and other variables. By filtering by carriers, for example, freight managers get an overview of the agreed, and incontestable, allocations per carrier. More specifically, they know how many containers a specific carrier has agreed to ship, or how many allocations, expressed in TEUs, they have already used with that carrier.
Logward also helps shippers when there isn’t capacity available from a carrier. Shippers can check if another carrier in the alliance has available capacity, provided the fully booked carrier belongs to an alliance, since this information is readily available inside Allocation Management.
Furthermore, companies with several business units can create different accounts for each. This guarantees that each business unit has access to its own allocations, and through Allocation Management, companies can prevent different business units from overbooking.
On the same platform, users can find all the information they need for their decision-making.
Better Relationships with Transport Partners
Better relationships with transport partners are important because in a fragmented logistics market where players work with several service providers, it has become more difficult to build long-term and reliable relationships.
Allocation Management allows users to quickly and accurately evaluate the performance of each transport partner so that they identify and collaborate with the most reliable partners, those who deliver their cargo on-time consistently and do not roll their shipments. Without this insight, it is easy to think short-term and default to the cheapest providers. Shippers have seen this mindset backfire as carriers now have more control of the market.
Moreover, users can seamlessly collaborate with stakeholders by sharing information with the platform since they can set access permissions and allow partners to see certain data. Transport partners can follow along beside the shipper when assessing the fulfillment of allocation agreements instead of sitting across a negotiation table once a year with conflicting information. Better cooperation leads to continuous improvement processes together with transport partners.
Inside Allocation Management
The setup and implementation process for Allocation Management involves just a few simple steps.
Freight Tender Upload
Setting up Allocation Management starts with uploading tenders for a given period, usually a year. The tenders must contain all shipping information that the users want to check, for instance: number of TEUs, service string, container type, or equipment type. After initial setup of what to include, users can still send updates to their shipping information to add more factors.
TEU Overview Setup
Users benefit from an easy overview, while also customizing it by adding filters. The overview allows to quickly check the total allocation planned in the tender, TEUs booked up to that point, remaining allocations, fulfillment in percentage, and a metric called “Booking without Allocations”, which collects bookings that do not match with the tender.
The tool provides different charts based on different metrics. For example, users can check which weeks and months are overbooked and which still have allocations available. Further data exploration is possible, such as finding out who has overbooked in a specific week. Users can also assess the performance of each carrier here, for example, by viewing booked TEUs vs. available Allocations.
Conclusion
Ultimately, effective allocation management enhances supply chain execution by optimizing resource distribution and streamlining operations. This allows professionals to focus not just on managing tasks but on executing smarter strategies, ensuring cargo reaches its destination on time with greater efficiency.
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