{"id":6133,"date":"2021-12-01T11:26:02","date_gmt":"2021-12-01T11:26:02","guid":{"rendered":"https:\/\/demos.pagifly.com\/cargo-chief\/?p=6133"},"modified":"2023-08-21T12:07:51","modified_gmt":"2023-08-21T12:07:51","slug":"optionality-for-improved-pricing-procurement-decisions","status":"publish","type":"post","link":"https:\/\/demos.pagifly.com\/cargo-chief\/business\/optionality-for-improved-pricing-procurement-decisions\/","title":{"rendered":"Optionality for Improved Pricing &amp; Procurement Decisions"},"content":{"rendered":"\n<p>Optionality is a hot topic in the transportation industry.&nbsp; The market is extremely volatile, and reliance on a single option for moving a load is often a recipe for disaster.&nbsp; As a result, it is becoming more apparent how a broker\u2019s overarching business strategy is (or should be) impacted by optionality.&nbsp; More specifically, the depth of a broker\u2019s carrier network (the number of carriers available for a certain lane) substantially impacts pricing and procurement decisions.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Optionality Through Carrier Networks<\/strong><\/h3>\n\n\n\n<p>First,&nbsp;<strong>pricing decisions<\/strong>&nbsp;are often directly impacted by the number of carriers a broker has available for a specific lane.&nbsp; A lane with an extensive network of interested carriers can be&nbsp;<strong>priced aggressively<\/strong>&nbsp;because a broker has several backup options if their primary carrier can\u2019t service the load.&nbsp; On the other hand, reliance on a single carrier elicits a&nbsp;<strong>more conservative<\/strong>&nbsp;pricing strategy.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Second, a similar story occurs with&nbsp;<strong>volume commitments and tender acceptance rates.<\/strong>&nbsp; Lanes, where brokers have depth in their carrier network, are more likely to see high volume commitments and tender acceptance rates.&nbsp; They simply have more carriers interested in that lane and can commit to greater volumes.<\/p>\n\n\n\n<p>Finally, the number of available carrier options even has an impact on&nbsp;<strong>max buy rates.&nbsp;<\/strong>&nbsp;Meaning the specific buy rate at which a broker is willing to book a truck.&nbsp; With greater depth in a carrier network comes an increased willingness to fight for a lower rate \u2013 if the first carrier on your list won\u2019t take the load, you still have fifty more to call.&nbsp; A load with only two available carriers is a much different story.<\/p>\n\n\n\n<p>In all of these scenarios,&nbsp;<strong>more options<\/strong>&nbsp;in a broker\u2019s network enable that broker to make pricing decisions that result in more business won.&nbsp; While this doesn\u2019t drive down the broker\u2019s cost to serve (as we see with automation), it directly impacts both a broker\u2019s revenue and profitability.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A Network of Quality Carriers<\/strong><\/h3>\n\n\n\n<p>On a related note, it is worth mentioning that&nbsp;<strong>a broker\u2019s carrier network is NOT simply the number of carriers they can find on a load board<\/strong>&nbsp;for a particular lane.&nbsp; For a broker\u2019s carrier network to be of any value, it needs to be filled with&nbsp;<strong><a href=\"http:\/\/www.cargochief.com\/\">quality carriers with whom the broker has a relationship<\/a>.<\/strong>&nbsp; Reliance on load boards has a number of disadvantages, not the least of which is uncertainty in the broker\u2019s overall pricing strategy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The Impact of Carrier Networks<\/strong><\/h3>\n\n\n\n<p>Looking back, the past year has highlighted the importance of optionality in a broker\u2019s carrier network.&nbsp; Brokers with deep carrier networks have been able to adapt and thrive in today\u2019s market, while those with more limited networks have struggled to stay afloat.&nbsp; As brokers evaluate their pricing and procurement strategies for the next year, they need to focus on&nbsp;<strong>increasing their available carrier options<\/strong>&nbsp;and&nbsp;<a href=\"http:\/\/www.cargochief.com\/\">evaluate how technology<\/a>&nbsp;can help with this goal.<\/p>\n\n\n\n<p>For more information about the impact optionality has on a broker\u2019s business, check out our latest guide, \u201c<a href=\"https:\/\/landingpages.cargochief.com\/tight-market\">The Value of Options in a Tight Market.<\/a>\u201d<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/landingpages.cargochief.com\/tight-market\"><img decoding=\"async\" width=\"300\" height=\"157\" src=\"https:\/\/demos.pagifly.com\/cargo-chief\/wp-content\/uploads\/2023\/08\/image-2.jpeg\" alt=\"\" class=\"wp-image-6135\"\/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Optionality is a hot topic in the transportation industry.&nbsp; The market is extremely volatile, and reliance on a single option for moving a load is often a recipe for disaster.&nbsp; As a result, it is becoming more apparent how a broker\u2019s overarching business strategy is (or should be) impacted by [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6134,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-6133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.11 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Optionality for Improved Pricing &amp; Procurement Decisions - Cargo Chief Demo<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/demos.pagifly.com\/cargo-chief\/business\/optionality-for-improved-pricing-procurement-decisions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Optionality for Improved Pricing &amp; 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