Transportation Company Optimizes Both Buy- and Sell-Side Pricing
The business of moving cargo from point A to point B is highly complex and fiercely competitive. It’s also changing as next-day delivery and digital selling have created a new reality in the transportation and logistics industry. To respond, this top-ten U.S. for-hire freight company specializing in intermodal marketing, logistics, and drayage wanted to transform its end-to-end sales process with the power of digital technology and data science. The goal: make the business more agile in anticipating customer needs and adapting to fluctuations in market conditions.
The transportation and logistics company’s pricing processes involved manually collecting historical data to create pricing guidelines. Data analysis was slow and time-consuming, often producing guidelines that became stale before they were even available for deployment. Making matters worse, the generated guidance was difficult to apply because it was not well-aligned to the way the carrier sold its services. Furthermore, there was no way to track adherence to pricing guidance, monitor compliance, or refine pricing practices.
The transportation provider wanted an intelligent, automated solution that would provide greater insight into pricing performance to correct margin leaks not only from how it prices its services but also from what it pays to operate. This multimodal solutions company also wanted to reverse its high churn rate of existing customers. Deeper insight into its vast customer data was necessary in achieving these goals.
The transportation and logistics company chose PROS because it met all its requirements for an AI-powered pricing and payable guidance solution. PROS solutions provide highly evolved and unique science around metrics like customer willingness-to-pay and win-rate elasticity yet are intuitive to use and easily scalable to additional business units.
With PROS solutions first rolled out to the transportation company’s intermodal shipping business followed by its truckload brokerage business, pricing teams now have data-driven, market-relevant analysis available to them in real time to determine optimal price-to-pay as well as optimal price-to-charge, maximizing profit margin for every shipping job.
On the sell side, PROS real-time pricing guidance enables the multimodal solutions company’s pricing team to construct defensible price strategies across business units with a true understanding of customer willingness-to-pay and market trends. This enables them to zone in on immediate opportunities for pricing and margin improvement while responding to bid requests quickly with an educated position on the likelihood of winning deals.
On the buy side, PROS shipment payable guidance gives pricing teams transparency into anticipated costs, enabling them to get real-time, optimal negotiation and rate-setting guidance to maximize margins. They can negotiate favorable payables, determine which payable offers to accept, and prioritize the most profitable carrier opportunities first.
With PROS pricing guidance solutions, the multimodal transportation provider has been able to effectively balance optimal price with the right mix of business while accelerating and personalizing the sales experience, which has driven increased customer satisfaction and reduced churn.
"New pricing tools utilized in the bid season have helped us to expand margin, grow our business, and improve our network efficiency by assisting us to make better pricing decisions,” the company’s CEO says.
Together, the PROS pricing and payable guidance solutions deliver on the transportation provider’s strategy to:
- Provide lane-specific recommendations for every bid and price request
- Optimize prices and costs to increase margins and revenues
- Deliver faster turnaround time for bids and spots using consistent pricing strategies
- Align pricing with truckload brokerage market trends to ensure competitive positioning
In the transportation and logistics business, speed is everything. Getting quotes out to customers faster with insight into what they value and prioritize as well as how that fluctuates with other market factors is key to maximizing the value of every sales opportunity. By replacing manual pricing recommendations with AI-powered guidance, the transportation company can now respond quicker to bid requests with the personalized pricing needed to accelerate win rates, reduce sales cycle times, and maximize profits.
The company plans to build on the successful implementation with additional PROS AI commerce solutions to deliver an even more integrated pricing solution that leverages the latest technology and product offerings to offer a superior buying experience.
Learn more about the advantages of PROS smart science in the Transportation & Logistics industry.