Shippers are increasing budgets and placing a higher priority on technology in response to ongoing supply chain challenges and competitive freight market conditions, according to research from freight procurement software provider Sleek Technologies.
Sleek polled 300 senior logistics leaders at distribution centers, manufacturing, and retail companies with annual freight spend of $100 million or more for its 2022 State of Freight Procurement Research Report, released earlier this month. The findings show that most shippers plan to increase their freight procurement budgets this year while also upgrading procurement systems and strategies to better compete in the market.
The study found that 97% of shippers plan to increase their freight procurement budgets in 2022, and that 52% will increase those budgets by 25% or more year-over-year.
“These findings illustrate just how competitive the freight procurement space has become over the last 18-24 months,” Mike Nervick, Sleek Technologies’ CEO and co-founder, said in a statement summarizing the report. “From boosting technology to trying to absorb higher costs, freight procurement professionals are having to ramp up their budgets to beat out competitors and meet customer expectations.”
The study also found that 96% of shippers have invested in new technology or strategies to help boost freight procurement performance as a result of Covid-19, with 95% saying their freight procurement operations have either “significantly improved” or “somewhat improved” since the start of the pandemic. What’s more, 66% of respondents said that automating freight procurement operations has become a high priority for their organization, with another 31% saying it is a “medium priority.”
Cost control issues (66%), on-time delivery (65%), and high primary rejection rates (46%) were the most common recurring issues that respondents encountered throughout the pandemic, according to the study.