Pricing in the logistics industry is currently under the pressure of the holiday season demand combined with the impact of the coronavirus pandemic.
In Q3 2021 Ti and Upply reported that Road Transport rates had increased for the 5th consecutive quarter and reached historic highs across the European continent. A shortage in cargo space, bottlenecks at major ports around the world, the rising costs of storage, and of course the covid-19 pandemic are some of the factors driving these rates.
During periods like these with high demand and low capacity, prices for freight transport can skyrocket leaving shippers, forwarders and the end customer has no choice but to settle for a really high price.
At TrustedTrucks we have integrated an AI-based pricing engine into the Quotation Request feature. The pricing engine aims to ensure that transports have a fair benchmark price range.
The pricing engine works by providing a recommended price for a particular transport based on parameters such as distance, loading meters, and weight. This makes sure that there is a fair price estimation for both parties on TrustedTrucks – forwarders, and carriers.
How can forwarders use the pricing engine?
When the forwarder creates a Quotation Request to send to carrier companies via TrustedTrucks – he/she will open up the TrustedTrucks AI Pricing Engine and input the pick-up and drop-off points for the freight, as well as the stops, the total weight of the freight, and the loading meters.
Based on this information the pricing engine will display a recommended price range:
The lower limit of the quote, upper limit of the quote, and recommended price estimate.
From this, the forwarder can ensure they’re aware of the price range for the particular freight and can use the pricing engine’s range to make sure the quotes they receive from carriers lie within a reasonable price range.
Why AI?
Artificial Intelligence (AI) increases the speed, accuracy and effectiveness of human efforts, particularly when working with large and complex data sets or calculations.
When it comes to pricing in particular, almost all companies struggle to figure out how to price their products or services fairly. Determining how their customers would react to different prices or to find out how they can get the most value out of their different customer segments are two more challenges that companies struggle with.
AI and machine learning can help companies to solve these challenges by using existing data to optimize pricing and inform pricing strategy going forward.
With the acceleration of the logistics industry’s inevitable digitalisation, AI and Machine Learning tools will give companies of all sizes the ability to leverage their business intelligence more effectively than ever before.
The TrustedTrucks pricing engine is the first application of AI and Machine Learning on the TrustedTrucks platform, it is currently in Beta, should you wish to try it out contact our team at contact@trustedtrucks.eu
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