C.H. Robinson’s Data Analytics Tool Optimizes Freight Procurement

Freight carrier and brokerage provider C.H. Robinson has introduced a new tool that lets shippers more efficiently procure freight by using data analysis to best determine when to contract and when to make spot market purchases in an increasingly volatile and disrupted trucking industry.

Procure IQ, developed in the company’s Robinson Labs incubator, inputs things like a shipper’s lane origin and destination and volume estimates, and overlays it on C.H. Robinson’s database of 18 million annual shipments from 200,000 carriers. Using predictive analytics and artificial intelligence, Procure IQ then provides procurement recommendations and capacity strategies for each shipment in a visualized format.

Tim Gagnon, Vice President of Analytics and Data Science for C.H. Robinson who heads up Robinson Labs, said the freight RFP process can be pretty mechanical and rigid. It often forces shippers into standardized outcomes that leave them stuck in contracts that don’t make economic sense based on rapid market swings.

“The diversity of freight and all the attributes that make it up, including factors like geography and seasonality, requires analytical and scientific evaluation to respond well, make sure shippers are getting a competitive price and service. This is a granular exercise that uncovers opportunities that challenge the historical process and annual commitments to price, leading to great conversations (between shippers and carriers).”

A beta test of Procure IQ among C.H. Robinson’s large shipper customers found using it could lead to an increase in savings or service reliability in up to 60% of their lanes, the company said in a release.

Gagnon said development of Procure IQ was a collaborative effort among C.H. Robinson, shipper customers, supply chain and technical experts. Food and beverage and retail are the two biggest verticals among its 110,000 customers, with the top 500 shippers making up half the company’s revenue.

Other factors that Procure IQ analyzes are demographics such as which markets are more weighted towards either consumers or producers, driving more inbound or outbound freight, respectively, all of which impacts pricing.

Gagnon said Procure IQ can be a win-win for shippers and carriers. For instance, it can match up and optimize freight from two shippers with the same carrier to create a more economical round trip with a competitive rate.

“Depending on data in the tool, it shows (shippers) factors like average rates per mile in producer and consumer lanes, and where the headhaul lane usually is executed at a premium and the backhaul at a discount.” he said. “Understanding this, they can discover the potential benefit of a round trip and find value.”

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