Mastering Pricing Strategies in the Freight Industry with Beau King
Update: 2024-08-28
Description
In this episode of Freight Nation: A Trucking Podcast, host Brent Hutto is joined by Beau King, Senior Director of Global Markets at FreightWaves.
Join them as they explore:
- Beau’s career journey
- Technology and automation
- Data analysis
- The intersection between different roles in the industry
- The importance of pricing
Beau King is the former Director of Pricing at RXO and currently serves as Senior Director of Global Markets at FreightWaves. His career spans across a number of logistics and transportation companies, and he has experience in pricing automation and strategy, influencing algorithms and pricing architecture, and developing new ways to leverage technology for pricing in transportation markets.
Episode Highlights:
[09:30 - 11:53 ] - While there can often be mistrust between brokers and carriers, Beau says that it is vital to build strong relationships with carriers, especially owner-operators. Beau focuses on understanding the preferences and limitations of carriers, such as where they like to operate, what type of freight that they prefer, and the pricing they find acceptable. By taking the time to learn these details, brokers can offer carriers shipments that align with their preferences, leading to better outcomes for both parties.
[17:33 - 18:56 ] - Beau emphasizes the critical role of pricing in the freight brokerage business and explains why understanding it thoroughly is essential. Pricing is a major focus in freight brokerage, accounting for a substantial portion of a broker's work. Beau mentions Andrew Leto speaking at a Freightways Conference saying how reps spend about 70% of their time on price discovery. Understanding how pricing tools work behind the scenes is also important. Beau suggests that many brokers expect a straightforward, pre-packaged rate from providers, but this is not always the case. Instead, it's important to understand how these rates are derived and what external market factors influence them.
[29:31 - 31:41 ] - Beau took over an existing automation program and focused on introducing governance, explaining that while many people desire precise answers from automation, effective governance is crucial to handle scenarios where standard answers may not apply. He cites three key aspects of effective pricing in an automated system: accuracy: how close a price estimate is to the actual cost; precision: the consistency of the pricing results; reliability: the overall dependability of the system. Beau adds that while accuracy is often prioritized, it’s essential to balance it with precision and reliability.
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