After the award
After the award
How to measure realized value
Projected savings only become real when execution follows the procurement plan. Freight must reach the awarded carriers, those carriers must accept it and costs and service must match the commitments made during sourcing.
Service performance was respondents’ most common measure of tender success, followed by actual versus projected savings and capacity secured and carrier acceptance. Yet execution against the procurement plan and spot-market usage ranked near the bottom. Comparing what actually happens with what was planned helps explain why expected results are not achieved.
One respondent summarized the challenge: “The biggest challenge is converting procurement into day-to-day execution: monitoring routing guide compliance, changing volume patterns and shifting carrier performance, while holding carriers accountable for service and routing guide compliance.”
From awarded value to realized value
Using a compact scorecard can help connect sourcing commitments to operational results. Start by agreeing on the scope, definitions and targets with your procurement, operations and finance teams. The measures below are practical examples, not survey findings.
Dimension
Award compliance
Example measure
Loads tendered according to the awarded routing guide versus all loads in scope
What it tells you
Is execution following the award plan and considers the strict allocation of orders to allocated carriers?
Dimension
Carrier acceptance
Example measure
Loads accepted by the primary awarded carrier versus loads offered to that carrier
What it tells you
Is committed capacity materializing?
Dimension
Cost realization
Example measure
Actual invoiced cost versus awarded cost for the same shipments, including fuel and accessorials
What it tells you
Are negotiated rates translating into realized cost?
Dimension
Backup Carrier acceptance
Example measure
Loads accepted by backup carriers versus loads offered to backup carriers
What it tells you
Does the fallback plan work?
Dimension
Service realization
Example measure
Carrier-controllable OTD (On-time deliveries) versus deliveries in scope, using the agreed delivery window
What it tells you
Are service commitments being met?
Dimension
Market alignment
Example measure
Contracted rate versus a comparable current lane benchmark
What it tells you
Does the rate still reflect market conditions?
Dimension
Sourcing effectiveness
Example measure
Volume sourced through the intended approach versus total volume in the segment
What it tells you
Is each segment using its planned sourcing strategy?
Dimension
Shipper compliance
Example measure
Volume sourced through the intended approach versus total volume in the segment
What it tells you
Is each segment using its planned sourcing strategy?
Dimension
Shipper compliance
Example measure
Volume sourced through the intended approach versus total volume in the segment
What it tells you
Is each segment using its planned sourcing strategy?
Use changes in performance to trigger action
When results fall short, it is important to investigate the cause. Volumes may have moved away from the original forecast, carrier performance may have deteriorated, capacity may have tightened or rates may no longer match the market. The response could be a carrier discussion, reallocation, a mini-tender or revised spot-market rules.
Service deterioration was the top trigger for revisiting procurement strategy, followed by carrier acceptance or capacity falling below expectations and contract rates diverging from the market. Scheduled periodic reviews ranked much lower. The calendar alone should not determine when to act.
Close collaboration makes this feedback loop work. In the survey, 46% described procurement and operations as mostly aligned and 37% said they were highly integrated. Sourcing teams need timely feedback from the people managing freight every day, and operations teams need clear visibility into the award plan. Both execution and market signals are necessary to inform the next procurement decision.
The level of collaboration between your transportation procurement and day-to-day logistics operations teams
Mostly aligned
Highly integrated
Somewhat siloed
Defined segmentation criteria
Different approaches, mainly judgment-led
Same approach across most/all lanes
