In 2021, the repercussions of supply chain disruptions were starkly visible across industries, with U.S. companies losing an average of $228 million each, heavily influenced by factory shutdowns. Retailers, particularly in consumer packaged goods, faced severe challenges; on-shelf availability rates for essential items like fruits, vegetables, and beverages dipped below 90%, leading to an estimated $82 billion in lost sales. Consumer behaviour shifted markedly: 20% postponed purchases, 10% sought alternatives elsewhere, and 16% turned to online platforms, cumulatively resulting in retailers forfeiting nearly half of their potential sales. These figures highlight a simple yet critical truth—empty shelves and closed factories translate directly into lost revenue.
The environment in which businesses operate today is characterised by relentless market volatility, a condition that appears entrenched for the foreseeable future. Freight rates can spike dramatically within a single day, upending procurement plans and straining budgets. This volatility poses a profound challenge for freight procurement teams tasked with forecasting spend when costs, conditions, and contract terms fluctuate with rapid unpredictability. The conventional approach of relying on long-term forecasting is increasingly untenable.
A more pragmatic strategy emphasises agility and frequent reforecasting, recognising that disruption is now the norm rather than the exception. Forecast cycles must shorten, and businesses need to adopt flexible freight strategies. This might include negotiating shorter contract durations and incorporating index-linked agreements with freight forwarders to allow swift adjustments in response to market changes. The overarching imperative is to move beyond attempting to predict exact futures and instead be equipped to respond dynamically and strategically as situations evolve.
This shift in approach was underscored by reactions to recent geopolitical events such as U.S.-imposed tariffs. Organisations typically responded in three ways: hesitating to act, frontloading inventory to mitigate risk (albeit increasing exposure to spot market price surges), or adhering to minimal quantity commitments while absorbing heightened costs like surcharges and tariffs. Once the initial turmoil subsided, the focus turned towards embedding resilience within decision-making models, tracking ongoing market developments, and anticipating impacts on supply chains and contracts.
However, one major risk lies in the widespread reliance on pre-established, long-term contracts. These agreements, often locked in months ahead, can become liabilities during sudden disruptions, failing to provide the flexibility needed to pivot in a rapidly shifting landscape. Procurement teams must therefore not just seek better forecasting for current volatility but prioritise the capacity to reforecast quickly, accurately, and confidently once disruptive events unfold.
The critical role of data in this endeavour cannot be overstated. Many organisations already employ freight intelligence solutions, but conventional platforms often falter in real-time relevance. If procurement teams rely on data snapshots that are weeks or months old, their decision-making risks being out of sync with the present market reality, particularly in the immediate aftermath of a disruption. Such lag can invite avoidable risks, including costly overpayments, supply chain stoppages, and damaged customer trust.
Studies support this view: over half of supply chain professionals report disruptions and shortages as extremely challenging, while 58% of leaders struggle with delivery accuracy during peak seasons. Supply chain disruptions not only impose direct financial losses—often averaging 6% to 10% of annual revenues—but also inflict reputational damage with long-term consequences for customer loyalty and brand value.
Real-time freight intelligence platforms that aggregate data from actual contracts and market movements up to three months ahead are emerging as indispensable tools. These systems offer procurement teams visibility into how peers and competitors are adjusting their strategies, clarifying expected costs, carrier performance, and contract terms in a post-disruption environment. Such insights enable faster adaptation, reducing operational and financial shocks.
Complementing real-time data, scenario planning is proving invaluable. By modelling theoretical disruptive events and their potential ripple effects on supply chains, organisations can proactively devise mitigation strategies, ensuring smoother responses when black swan events do occur. Another potent tool is index-based contracting, which shifts the freight procurement culture away from infrequent annual renegotiations toward more dynamic, market-timed adjustments.
Looking to specific historic parallels can also inform forecasting. For instance, companies that had data on market behaviour following President Trump’s first election were better equipped to navigate the uncertainty when he was re-elected in 2024. Similarly, in-depth analyses of past disruptions like the 2020–2023 global chip shortage—an event that cost the automotive sector $210 billion in 2021 alone—offer valuable context about the interconnectedness and fragility of modern supply chains.
Ultimately, the freight procurement landscape is demanding a fundamental evolution in forecasting philosophy. Organisations must accept that even the best long-term forecasts will be disrupted and instead build robust capabilities for rapid, evidence-based reforecasting. This approach mitigates risks such as excessive freight costs, supply delays, and operational bottlenecks, enabling resilience and competitiveness amid ongoing volatility.
Solutions like the Xeneta platform, combining historical and near real-time freight data with expert analysis and a collaborative community of shippers and carriers, exemplify how technology can equip procurement teams to navigate these challenges. By integrating deeper insights and fostering agile decision-making, such tools empower businesses to not only weather disruptions but to transform them into strategic advantages. As market volatility becomes the new normal, mastering rapid reforecasting is no longer optional but essential for survival and success.
Source: Noah Wire Services
