What's a Dynamic Routing Guide and How Is It Different from a Static Routing Guide?
There’s been a lot of buzz over dynamic freight routing guides over the past several years, but how are they different from static routing guides? Is one better than the other in certain situations?
Understanding Routing Guides
A routing guide begins when a bid is complete and lane awards are issued. Routing guides are simply ranked lists of carriers to whom you plan to tender your freight and initially, guides are static in nature.
They serve several purposes including:
Insuring bid awards are compliant on the shipper's end
Providing a strategy guide for loads or situations that fall outside the normal boundaries
A cost-savings guide for shippers to help control transportation costs
Routing guides used to be done on paper, but now almost every routing guide, whether static or dynamic, is digital.
What are static routing guides?
Static routing guides use only the data at hand at the time they’re created. This data includes load and carrier capacity projections, and, though they often account for many “what if” scenarios, they can’t account for them all. When a static routing guide fails (which frequently happens in a tight market), it leaves shippers scrambling to get loads covered.
What are dynamic routing guides?
Dynamic routing guides are designed to take into account current, real-time data such as actual instead of projected freight volume, predictive carrier capacity, among many other data points. Algorithms are able to continuously adjust routing recommendations on the fly as changes or issues inevitably occur, so shippers can get freight covered and keep more loads off the spot market.
What are the key differences between dynamic and static routing guides?
The main difference between static and dynamic routing guides is that dynamic routing guides bend and flex with the current data while static routing does not. With static routing, you might also be working with outdated or inaccurate information because it represents a snapshot in time.
Smaller brokerages that work with only a handful of carriers with steady freight flow in predictable/same lanes will likely find a static routing guide sufficient because there are fewer contingencies for which to plan. Dynamic routing is better suited to today’s complex supply chains, given the many moving parts involved in getting freight from origin to destination daily.
When is it time to switch to a dynamic routing guide?
Tender rejections are still high, though not as high as they were pushed at points during the pandemic. That makes flexible routing guides more important than ever. If 20% of your loads are rejected by your primary carriers, a dynamic routing guide will help you prepare the best possible backups with real-time data and predictions and offer flexible tendering. Stick with a static routing guide, and you’ll likely spend a bundle getting them covered on the spot market.
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