The Real Savings Numbers from a Shipping Overhaul
When a large company gains the sophistication to dictate how they want freight shipped from a supplier, it’s a good bet that they have negotiated rates with carriers that are better than those in a prepay/add scenario—and that they put some thought into who that carrier should be. None of this happens by itself, but thanks to the resources of TForce Worldwide and Customodal, the following ingredients could be added to ABC’s knowledge base to enjoy the benefits of inbound freight management.
Phase three was the most labor-intensive and involved purchasing re-engaging vendors who sold to them “freight included.” Buyers identified the cost to purchase “without free freight” on our inbound program and compared those costs with the status quo. In about 40% of those vendors, it made sense for our client to forgo the “free freight” and implement the new inbound freight programs. In about 60% of those vendors, the vendor’s freight was a good deal and was left as is.
The Real Benefits of Inbound Freight Management
By the end of phase three, a $400k/year inbound freight bill was reduced to $250k on the same company sales volume. Seven years later, sales have doubled, and freight costs will run about $575k for the year.
Aside from the significant cash savings, our client has not increased their employee numbers in shipping during the period. They did, however, take advantage of our freight claims education program to implement claims reduction best practices and leverages their relationship with their account manager. The account manager provides them with industry news and trends, a never-ending stream of logistics improvement project ideas for continuous improvements, consults on the shipping needs of products in R&D and prospective new vendors as well as regular reporting on logistics metrics.
Ready to Enjoy the Benefits of Inbound Freight Management?
Contact Customodal if you’re ready to enjoy the benefits of inbound freight management. We look forward to connecting with you and assisting in unifying your company’s shipping efficiencies across all platforms.