As Spot Rate Agreements Become the Norm, Pactum Empowers Teams to Eliminate Complexity and Overcome an Ever-changing Economy
As global logistics teams toss out annual agreements and turn to the spot market, Pactum, the creator of AI-driven autonomous negotiation technology, announced the availability of its new autonomous short term rate negotiation solution at The Risk and Resilience Conference in London. The technology will transform the way shippers, freight forwarders and carriers negotiate and contract less than annual shipping capacity. Working with clients’ existing carrier networks, the first-of-its-kind technology offers a dynamic, faster, and more effective approach to short term negotiations by instantly identifying, analyzing, negotiating and contracting short term freight deals at scale.
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“We created a new solution that uses AI to simplify the process by combining the predictability of long-term agreements with the flexibility of spot rate deals. It’s the best of both worlds.”
Economic volatility, constant supply chain disruptions and rising inflation have outdated annual contract agreements because they are either inflated to protect from risk or too low for carriers to justify doing business. Spot rates have become the norm for shippers, but these come with risks such as moving large volumes on uncontracted, fluctuating rates which lead to revenue loss. Additionally, the spot rate process is extremely complex, costly and resource intensive, and requires manually searching for and negotiating last-minute rates with numerous suppliers every week. Pactum’s new autonomous short term rate negotiation platform is the first solution to solve this market challenge by instantly performing multiple short term rate checks and negotiations in minutes.
Pactum’s solution adds value for the entire logistics network by combining the benefits of contracted rates with the agility and flexibility of short term rates. As ecommerce grows, and reducing the last mile to end customers becomes more important, Pactum’s new solution enables inland networks to be more responsive and scalable to market fluctuations.
“The freight market has fundamentally changed. The entire ecosystem is turning to spot rates in lieu of the traditional annual contract. This creates tremendous pressure on operations teams and carriers to find and negotiate last-minute deals,” said Martin Rand, co-founder and CEO of Pactum. “We created a new solution that uses AI to simplify the process by combining the predictability of long-term agreements with the flexibility of spot rate deals. It’s the best of both worlds.”
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Using advanced mathematical models, cognitive science and best-in-class negotiation techniques, Pactum can complete a typical negotiation in two minutes, which is much faster than humans can do alone. Key functionality includes:
- Predictive pricing: Pactum leverages past rates, contract rates and market conditions to drive current pricing.
- Prescriptive recommendations: The technology uses past performance, engagement, pricing and bundling of vendor relationships to reach out to the best carrier for the job.
- Automation: AI-powered chat interface negotiates contracts with carrier partners to reach mutually beneficial deals for all parties involved.
Pactum’s autonomous negotiation solution easily integrates into procurement teams’ existing technology stacks and has already proven effective for users. To date, 95% of the autonomous rate negotiations executed by Pactum have resulted in joint value for the parties involved.