How a Fortune 500 Beverage Shipper Cut Spot Loads 40% in Oracle OTM

A Fortune 500 beverage manufacturer wanted the speed of auto-tendering in its Oracle OTM transportation management system (TMS) without the risk of paying above-market rates. Loadsmart API RateGuard put a dynamic price ceiling on every auto-tendered lane, and the shipper auto-tendered 5,000 loads within budget.

By the Numbers

At a Glance

Auto-tendering loads with API rates in a routing guide keeps freight moving in a tight market and passes real-time savings to the shipper in a soft one. It also makes cost containment harder. A Fortune 500 beverage manufacturer needed a way to keep auto-tendering in Oracle OTM without overpaying.

Challenge: Capping Costs While Auto-Tendering

When a demand surge hit in 2021, the beverage manufacturer took advantage of API pricing and added several digital freight brokers to its routing guide as backup carriers, auto-tendering loads at their API rates.

Then the team ran a spend analysis. It found multiple instances of API rates from digital freight brokers coming in well above the typical market rate. Because of that risk exposure, the shipper shut down all of its API-connected carriers.

That fixed the overspend but created a new problem. The team still needed technology to keep up with high-volume freight, avoid the spot market and give planners more capacity.

Solution: Putting the Right Guardrails in Place

The shipper integrated Loadsmart’s Dynamic Routing Guide and API RateGuard directly into Oracle OTM, its existing TMS. API RateGuard sets a dynamic price ceiling for each lane based on an industry benchmark, and the ceiling moves with the market.

Each time a load comes up for auto-tendering, the check is simple:

• If the Loadsmart price is below the ceiling, the quote is sent back and the load can be auto-tendered.
• If the Loadsmart price is above the ceiling, no quote is sent, so the load never books at that rate.

Strategy: Automate the Routing Guide Inside a Budget

Set ceilings by lane, tied to a benchmark. Every lane with auto-tendering got its own dynamic ceiling. As the market moved, the shipper could be confident that every auto-tendered rate was competitive.

Bring API rates back into the routing guide. With the ceilings in place, planners knew they would never get a Loadsmart rate above the set limit. That let them confidently set up a routing guide with API rates again.

Auto-tender on rejections and better rates. Loads went to Loadsmart automatically when carriers rejected a tender or when the API rate was more competitive than the static routing guide rate.

Result: Overspend Risk Eliminated

After the shipper implemented Dynamic Routing Guide with API RateGuard in July, the number of loads booked manually on the spot market dropped. The shipper auto-tendered more than 5,000 loads over a few months, all within budget, and booked 14x more efficiently than it could manually.

As auto-tendered volume grew, an average of 40% fewer loads were routed to the spot market over the course of a year, which led to service improvements and cost savings. The combination of Loadsmart and Oracle OTM gave the beverage manufacturer the right guardrails to keep auto-tendering under control as the market changes.