Content from our sponsor

Value is More Than Just a Base Rate

A true logistics partner will look for savings beyond the obvious.

By ·

If you are tasked with finding the best freight and logistics solutions, you know that only six underlying cost drivers truly influence the final price:

  1. Base Rate
  2. Distance/lane
  3. Commodity type/freight class
  4. Average weight per shipment
  5. Fuel surcharges
  6. Accessorial charges

Don’t let a seemingly competitive base rate overshadow the remaining five cost drivers. Your real power as the buyer lies in the knowledge that there are other levers to pull to save your company, and your customers, more.

Comprehensive and Personalized Strategies

Strategic supply chain managers exist to help you navigate the challenging world of logistics. A good supply chain expert should possess the following core competencies:

  • Experience in analyzing processes to intimately understand your business’ inner workings
  • Eagerness to dive into standard operating procedures to help you leverage improvement opportunities as they come up
  • Deep knowledge of transit times and inventory requirements, and the influence they have on freight costs
  • Ability to identify moving parts of your supply chain and marry rate with other options (route, weight class, lead time, etc.) to position your company in an optimal scenario.

A customized approach will expose savings opportunities that a big box logistics provider is either not going to reveal or take the time to uncover for you. But digging into the details is imperative, because things like inventory purchasing, contracts with vendors and lead times can all impact your bottom line.

Nothing but the Truth

Many logistics and freight providers extol the virtues of their customer-centric approach to business. But as plenty of shipping managers may tell you, these claims do not stand up in the real world. You are not alone if your provider has suddenly blindsided you with hidden fees or was unreachable when you needed them most. First and foremost, you should look for a partner who operates a transparent business in an industry where rates are systemically used to mask margins structures. Demand suppliers show you how price is calculated and what options exist, because you don’t have to tolerate a solution that primarily benefits the freight provider.

Good, Better, Best

To understand how smart supply chain strategy works in the real world, consider one large e-commerce retailer who had been choosing carriers based on geography, not on any other detail, such as weight or carrier footprint. Finally, the retailer engaged with Visible in hopes that its robust technology and strong relationships with multiple carriers could save the e-commerce company more.

In the end, if Visible had simply utilized the same carriers and same base rate by optimizing routing, our customer would have saved about 10 percent. Not bad. If we had used our standard base rate, our customer would have saved 18.4 percent. Not bad at all. HOWEVER, we went even further and optimized the entire scenario by utilizing both site-specific pricing and the best routing to save the customer 22.8 percent.

Customized Savings

Your transportation manager may think that a particular carrier is optimal, but a strategic supply chain partner will truly know the best options based on a host of thoughtful criteria. Experts like Visible also have more technology at their disposal, enabling them to rate shop multiple carriers and give you more insight into, and control over, the selection process.

A Good Partnership is Priceless

When you’re with a true supply chain partner, you get more than a lower overall freight spend. You enjoy tailored service and better overall efficiency and productivity so you can devote more energy to other important business functions.


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.


Latest Whitepaper
Making the Case for Using a Transportation Management System for Parcel Shipping
We discuss the key pain points that all parcel shippers are dealing with right now and show how a multi-carrier transportation management system can help reduce costs, improve efficiencies, and improve the organizational bottom line.
Download Today!
From the June 2019 Logistics Management Magazine
Over the years, we’ve tried to steer clear of too many themed issues because we’re proud to offer our readers a wide breadth of industry information. The logistics and transportation market is so diverse, and shippers are looking to solve a multitude of challenges across a number of modes and services areas—never just one.

Warehouse Execution Systems (WES) Evolves Beyond “inside the four walls”
Got labor? How supply chain companies are recruiting talent during a labor crunch
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
How to Solve The Unique Challenges of Multi-Carrier Parcel Shipping
Join Logistyx President Ken Fleming for an appraisal of multicarrier shipping, TMS solutions and the nuances of interpreting Gartner’s Magic Quadrant for TMS, without a barcode label in sight! Using case studies, review scenarios traditional TMS solutions struggle to manage, such as high volume and international shipping, and learn why parcel shipping requires a different solution and how to design your process and architecture to leverage both effectively.
Register Today!
EDITORS' PICKS
Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...

2019 Rate Outlook: Pressure Builds
In 2019, the world economy will enter a third straight year of broad-based growth, but many...
2019 Transportation Management Systems (TMS) Market Update: Keeping pace with the times
The transportation management systems market is growing right along with the number of challenges...
fantasy coming of age books

segodnya.ua

верхняя одежда для детей