Friday, September 23, 2011

Getting Better Freight Rates

Controlling Transportation Costs
If you are in the freight industry, you know that transportation has changed dramatically in the last twenty years. Shippers now realize that they must control their costs through analysis used to help them in the decision making process.

Companies now have the option to truly control transportation management. Most companies research and perform pricing on the basis of a percentage of sales associated with freight. But why not use true numbers? Using your own tariffs and using comparisons of all of your shippers as a basis for pricing. It is now possible for any sized company to truly manage their costs without a huge investment in Information Technology.

Most financial methods look at freight transportation as a fixed cost, and therefore apply constant financial measurements to apply to expenses. However, Freight has always been random, dynamically changing due to conditions, without regard to whether costs are too high or managing claims issues, brokers and 3 PL hidden costs. Many executives look at Freight as a service to sales, but not controllable.

Transportation Managers have always had to struggle with the different modes and control associated with the fundamental changes in freight, discounts, (regional, interregional, direct and indirect), negotiable and non negotiable accessorials, fuel surcharges, freight of all kinds and how to properly manage them. Some transportation departments call carriers all day trying to get the best pricing and spend enormous amounts of labor to achieve possible $100 in savings.

Brokers and 3 PLs use this confusion to “benchmark” pricing and receive large compensation for each of your shipments. They do this through the expense of auditing, but most billing has to be re-audited internally to insure true discounts is applied. Another expense which is not accounted for. But wait, didn’t you pay for this?

How about end of month control? Are you shipping heavier at the end of the month to ensure you are reaching budget? Is the control in place to get the pricing?

Finally there is a solution to truly control your transportation costs. N2TMS is a software company, designed with the shipper in mind. Control of the shipment begins at the shipper. The decision making process can be spread across the organization, ensuring consistency and low labor expense. Always choosing the lowest carrier based on a comparison of all of your carriers using your tariffs. The ranking is always provided based on least to highest for each shipment. Payables are lined up with spend to ensure freight expenses are in line with the cost side expectations.

Negotiations are enhanced with carriers to ensure shipping is easily tracked and decisions are made on analytics and not salesperson give-ways.

Isn’t it time to give your organization the control needed to know your freight and better handle your negotiations? Call N2TMS now, get a demo and find out how to truly control your freight costs.

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