Put Bumpers on Dynamic Pricing: Roll with Adaptive Price Ceiling Guardrails for Enterprise Shippers

Dynamic pricing TMS integrations were introduced to a freight market in 2017 with relatively predictable seasonality; in 2021 the same approach is being used in a market with unprecedented day-to-day volatility. Supply of trucks and freight volumes–the two main ingredients of a real-time, fair market rate–no longer fluctuate by the season, but by the hour. Enterprise shippers who leverage auto-tendering to save time need automation controls (also known as guardrails) to give them the best of both worlds: instantly bookable rates with guaranteed tender acceptance, and a dynamic price that is within budget thresholds.

Introducing The Adaptive Price Ceiling Guardrail

Loadsmart works with shippers to complete a situational analysis and determine customized ceilings for a set of lanes. It’s a data-driven approach to building automation with controls and pricing transparency. With a custom price ceiling based on industry benchmarks set, our enterprise shippers only receive pricing that falls within a threshold. They get the flexibility to move with the market while staying within the preset and market-determined budget range to keep a handle on costs. 

How We Got Here: From Point A (2017) to Point B (2021)

Let’s take a trip down memory lane to the year 2017. Loadsmart has just announced one of the first dynamic pricing integrations with Oracle and dynamic, fair market rates typically rise above your annual contracts from May through August and November to December and they typically fall below your annual contracts from January to April and September through October. This seasonality is governed by supply and demand, which ebbs and flows: produce season, back-to-school, and the holiday season are all marked on shipper’s calendars. With these variables relatively locked in for three months at a time, your dynamic rates don’t vary much across the same timeframe. If you leverage auto-tendering to save time and you tender to Loadsmart, you are confident you are spending less in January and more in May compared to your static contracts.

Let’s flash forward to 2021: we are in what some are calling “perpetual peak season” and supply is affected by a driver shortage. This makes both demand and capacity more volatile. With seasonality out the window and day-to-day volatility in the door, it’s time for dynamic pricing integrations to evolve. The set-it-and-forget approach to load tendering based on dynamic rates from a range of providers is no longer the leading edge use of technology.

What’s Next: Beyond 2021

Our enterprise shippers need guardrails to protect them from today’s market disruptions – while transit times and on-time performance are all still meeting expectations. Adaptive price ceiling guardrails allow them to deploy automation knowing that the rate received is instantly bookable, guaranteed to be accepted, and within budget thresholds.

To learn more from an enterprise shipper rep about how guardrails can help you get the most out of your dynamic pricing–fill in the form below: