How a freight spend analysis can help you save on shipping.
March 9, 2017
Today’s businesses are under increasing pressure to reduce costs while improving overall efficiency. When it comes to shipping, one of the primary challenges businesses need to address is often referred to as “the Amazon effect.”
What we mean here is that consumers and businesses (which are run by consumers) are now trained to expect goods to arrive more quickly than ever. This evolution may spur logistics managers to rethink the fulfillment and shipping process.
With cost savings and efficiency in mind, logistics managers are trying to gain more information about their freight shipping spend and the effectiveness of processes. One problem – visibility of this data seems to be lacking. As a result, businesses could be missing out on opportunities to invest in other areas like hiring additional resources or improving infrastructure.
An in-depth freight spend analysis completed by a freight service provider is one way you can combat the visibility conundrum, reduce spend and increase efficiency.
How exactly can a freight spend analysis help you? Let’s take a look.
Review past data.
When it comes to freight shipping, a lot can be learned from recent history. A freight spend analysis starts with collecting and analyzing recent shipment data (typically from the last 30 days or so). The information gathered allows freight experts to access your shipping routes, locations, modes, volume, carriers used and more, which will all be used to establish a baseline.
Freight service providers understand that each shipment is unique in terms of value, timeliness and material. A freight spend analysis allows them to take advantage of their full network of contract carriers and align the most appropriate to each of your shipments. Additionally, the freight spend analysis could identify consolidation opportunities, leading to a reduction in costs.
A freight spend analysis allows the freight service provider to dig in to the specific shipping details and uncover areas of financial opportunity that may be overlooked by shippers.
Custom reports are the final leg of the freight spend analysis. Freight services that generate these reports allow you to customize based on your key performance indicators (KPIs). Once the report is defined, you gain access to freight history and can begin making data-informed decisions.
Additionally, reliable freight services will have a dedicated freight shipping expert to help answer any questions that arise throughout the process.
As customer expectations continue to evolve, businesses that are providing goods need to do the same.
Brad Wyland, Sr. Research Analyst with Aberdeen Group, says, "We've seen a tremendous amount of activity in the area of transportation spend management as more and more logistics managers scramble to gain visibility into the true costs their companies are incurring on a regular basis. We've seen that manual spreadsheets are not effective enough to provide the visibility necessary to be strategic in the transportation procurement process."
A freight spend analysis is just one way to get the job done more effectively.
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