The Truth About Routing Guides
Typical Routing Guides are made using data that is usually 12-18 months old. In today’s shipping economy, that’s several lifetimes and it’s costing you money every time you ship. Dynamic Routing takes the most current available data factoring multiple input variables and offers it in a “decision-now” environment, eliminating the wasted time and imprecision of routing guides.
The Rigidity of Routing Guides
By their nature, routing guides are a uni-dimensional document that considers a single snapshot of a single shipment on a specific date comparing several carriers. The cheapest carrier under those specific parameters wins space in the routing guide and gains favor with a buyer.
However, everyone knows (including the carriers) that no two shipments are alike, which basically renders routing guides of little value except for that unicorn shipment that happens to match the parameters in the initial routing guide. In other words, routing guides as a cost-saving tool are a myth.
AN EXAMPLE OF ROUTING GUIDE FAILURE
A manufacturer has three shipments, all going to the same location. Each shipment has a different weight, volume, and class. Because of the preset parameters of their routing guide, all three shipments are recommended to go on the same carrier.
Did that manufacturer receive the best pricing for those loads? Maybe for one, but the loss of savings on the other two shipments far outweighs any savings on the first.
Why?
While all three shipments are going to the same location at the same time, their specifications vary widely, as do subsequently, the prices for each. Because their routing guide made no accommodation for specifications outside their pre-selected spec, other carriers may be able to save the manufacturer significant shipping dollars simply because of the varied specifications.
So the routing guide pointed the manufacturer to a single carrier at a cost of, say, $1000. However, using a new technique that employs a broader range of variables and more current pricing data, the manufacturer might have spent only $750—for the identical shipments!
If that scenario played out just once a day, the manufacturer would save over $$65,000 in a year. With many manufacturers, however, that scenario occurs many times each week, with potential annual savings in the hundreds of thousands of dollars—with no extra effort on their part!
The conclusion: routing guides are costing manufacturers significant money that could have otherwise gone directly to their bottom line. Read on to learn how this is done.
Introducing Dynamic Routing
While deeply flawed, routing guides were, until now, the best technology available to buyers. But those days are over.
Customodal’s Dynamic Routing through our online portal looks at every quote from several angles to determine a unique cost derived specifically for that shipment. From there, the top carriers are rated and presented on-screen from which the route/cost/transit time/carrier that best suits the buyer can be chosen.
And all this happens in less time than booking freight the old way.
Routing Guides are a Crutch. Dynamic Routing Saves Money.
By eliminating the Routing Guide and its one-size-fits-all approach to shipping and replacing it with Dynamic Routing to modernize and broaden shipping options with minimal time investment, manufacturers statistically cut raw freight costs by up to 25%.
When both outbound and inbound are considered on the broader company level, that often doubles the annual money saved, or more, with less labor invested. For some, that can mean millions.