Transfix, Inc., announced the launch of a beta program for its new sourcing optimization tool. The solution is designed to modernize the traditional freight procurement process by allowing shippers to calibrate carrier commitments and optimize their freight spend.
The tool predicts and prescribes a sourcing strategy based on historical and real-time data. This enables shippers to procure capacity at an anticipated optimal rate with the highest expected reliability, and streamlines the sourcing process to days instead of months.
"We've spent almost a decade working with some of the largest brands understanding their networks and procurement process and we feel their pain – manual labor, overhead costs, tender rejections, contract cancellations, and more," said Jonathan Salama, Co-founder and CTO of Transfix. "After accumulating data on the market and developing our machine learning models, we have the insights to help shippers run an effective procurement program that allows them to build sustainable relationships with carriers in shifting market dynamics."
Transfix's new solution recommends the projected optimal procurement scenario for specific lanes, based on a combination of data-driven factors.
The tool will recommend four purchasing options aligned to specific lanes. These categories include:
- Existing Contract. Shippers have vetted these lanes, carriers are familiar with the facilities, and Transfix's model understands the rates are better than what shippers can get if they started a new RFP. Transfix recommends shippers award these lanes to these carriers and not bid them out.
- New Contract. The solution analyzes lanes and looks at current carriers' performance, volume of shipments, and market prices to package the lanes into a smaller RFP for shippers.
- Spot. The system recommends the spot market for certain lanes. If shippers don't run those lanes as frequently, turning to the spot market can yield the optimal price.
- Dynamic Cost-Plus. While a traditional cost-plus program only uses historical rates, Dynamic Cost-Plus uses a real-time, AI-predicted price. Transfix's data-driven approach allows shippers to take advantage of market volatility and not commit to an annual contract. This can benefit both shippers and carriers with lanes in seasonal markets, and with sporadic volume allowing them to build sustainable relationships.
Once shippers finalize their analysis and decide how to allocate their shipments, they can execute the RFP directly from the tool. Every carrier will have the option to select their respective lanes, agree to the contract, or bid on lanes.
Following the broader launch, shippers will be able to integrate the solution into their existing TMS via API or execute their RFP directly from Transfix TMS, an end-to-end solution for shippers across the shipment lifecycle — source, route, tender, track, and settle.
"This solution will continually evaluate new opportunities and alert shippers when market conditions have shifted in their favor, prompting them to contract, re-price, or move to a Dynamic Cost-Plus scenario," added Salama. "Our goal is to calibrate shippers' transportation strategy to optimize service levels and spend to ultimately remove any potential inefficiencies in freight."