For as long as the transport sector has existed, it’s sought to become more efficient.
Right now, the sector needs a sizeable efficiency gain.
I say as much because, since 2019, transport costs have increased by about 40%. Transport rates, meanwhile, have increased by about 20% (see TEG’s recent whitepaper for more detail).
So whichever way you look at it, transport margins are dwindling. And at present, elevated fuel prices as a result of instability in the Middle East aren’t helping anyone.
Efficiency appears the to be the solution 3PLs desperately need.
Which is why it’s time our sector rethought carrier sourcing.
The inefficiency built into traditional carrier sourcing
In many businesses, sourcing still plays out as follows:
A transport planner needs a carrier. They consult a spreadsheet of favoured carriers and start calling around. Or they send a request to a mailing list and wait for replies.
The method works. Most of the time, at least. But it’s inefficient.
That’s because the planner only ever contacts a tiny fraction of the market. The carrier the planner therefore teams up with is rarely the best-located, best-equipped or most cost-effective option. The carrier is simply the first available option from a small, familiar pool.
Setting aside the time wasted calling carriers, poor vehicle positioning causes empty miles. And those empty miles make for rates that are higher than they could be.
A wider market without risk
TEG Carrier Sourcing works differently.
Rather than calling around, with TEG Carrier Sourcing, transport planners can tap into a marketplace of thousands of carriers on-demand. So instead of contacting and working with the same small group of suppliers, planners get a far wider breadth of choice.
Digital sourcing means planners are more likely to find well-located carriers that are suitably equipped and able to meet the specific requirements of a job. The result is a highly efficient match between planner and carrier, or buyer and seller.
Just as important: TEG Carrier Sourcing does not jeopardise transport standards. It may even improve them. That’s because TEG Carrier Compliance ensures carriers using the TEG platform meet enterprise-level requirements.
So rather than trading efficiency for risk, with TEG, 3PLs can have their cake and eat it. Efficient sourcing. From safe hands.
Less chasing, less paperwork, less wasted effort
The efficiency gains don’t stop at the point of booking, either.
Traditional sourcing usually leads to a great deal of admin long after a carrier has unloaded freight. PODs need to be logged. Invoices need to be reconciled. Payment files must be created. All told, the admin that comes with traditional carrier sourcing can mean back-office teams spend as much time sorting paperwork as it took to deliver the freight in the first place.
The TEG platform reduces much of that friction. Compliance is already handled through the platform, and planners can check carrier documents whenever they need to. Crucially, PODs and invoices also come in through the platform, making life simpler for transport teams and back-office staff alike.
That means less time spent on phone calls, emails and paperwork, and more time spent making money by moving freight.
Wins for 3PLs, for carriers, and for shippers
When carrier sourcing becomes more efficient, the benefits spread throughout the logistics sector.
Transport planners spend less time ringing around and chasing carriers. Carriers face less waste and fewer unnecessary miles. 3PL margins become healthier. And shippers can benefit from sharper rates.
Efficiency is becoming essential
For years, greater efficiency has been a worthy transport ambition. Recent market shifts mean that now, for 3PLs, further gains are becoming essential.
Smarter carrier sourcing may not be the only area in which 3PLs can trim waste. But it is one of the most obvious.
By replacing small carrier pools with large, digital networks, 3PLs can reduce wasted time, reduce wasted miles and reduce shipping rates… all while protecting and improving margins.
That’s exactly why, right now, smarter carrier sourcing deserves closer attention.
