Reverse Auction for Transportation and Logistics

by Electronic Logistics LLC

Published on this site: August 29th, 2006 - See more articles from this month

Traditionally, logistics and transportation are extremely important for successful operating of any company as well as the whole market at large. It is necessary to point out that, as a rule, the main goal of producers and sellers, as well as buyers, on the other hand, is to minimize costs for transportation and logistics and deliver goods to customers in possibly shorter terms. In the current situation, a variety of tools is used to achieve this goal. In this respect, it should be said that innovative technologies, especially IT, computing, Internet, etc., are playing increasingly more important role and are commonly used to facilitate transportation and logistics. As a result, auctions, using an electronic reverse auction platform, are growing to be popular and widely spread.

First of all, it is necessary to point out that electronic reverse auctions have a lot of advantages compared to conventional auctions. Nonetheless, in order to better realize their efficiency, it is necessary to dwell upon the most significant ones. Primarily, it should be said that electronic reverse auctions may lead to a successful cooperation between producers of different goods to transport to various destinations and carriers.

Naturally, it is logical to wonder what both producers and carriers benefit from such cooperation. It is worthy to note that this may lead to increasing of speed of transactions since producers receive not only the possibility to sell their goods but, at the same time, they have got a possibility to find a carrier that can deliver the goods to the destination. In such a way, two operations could be run simultaneously that seems to be extremely beneficial for sellers, i.e. producers.

Furthermore, it is necessary to underline that the reverse auction provides producers with the possibility to choose from a large amount of carriers. In such a situation, the essential conditions for open and fair competition are created since producers can choose carriers on the basis of objective
principles identical for all participants of the auction.

On the other hand, carriers can supply their services to a large number of sellers and, consequently, can also easily find their potential customer. Moreover, the open competition stimulates carriers to the improvement of their services and it may also result in certain decrease of costs of transportation for producers.

Also, it should be said that the implementation of new technologies, notably electronic reverse auctions leads to the implementation of high technologies in transportation and logistics at large. Moreover, it also opens new perspectives for reverse auctions since, being based on electronic platform, they can involve unprecedented amount of participants. Consequently, the probability that producers will find their clients and carrier, which will transport the goods to the destination at possibly lower costs, increases.

Thus, taking into account all above mentioned, it is possible to conclude that the implementation of electronic reverse auctions leading to better cooperation between producers and carriers perfectly demonstrates the possibilities of new technologies applied to business at large and transportation and logistics in particular.

The future of transportation and logistics Electronic Logistics LLC http://www.electroniclogistics.com