Freight is often seen as a core expense; however, many organisations do not have the internal expertise or resources to review their expenditure in detail and therefore continue using the incumbent supplier without benchmarking against market prices.
Organisations can dramatically cut suppliers’ costs by finding ways to work more efficiently with suppliers, and these savings go straight to the bottom line.
Rising Fuel Costs and Inflation
With fuel costs rising, it is time to review your Freight rates.
Have you benchmarked your freight costs per unit?
Although we can’t reduce the cost of fuel, we can certainly check and see whether you are paying market rates and whether the calculation by your provider is in line with industry standards.
Areas you should be monitoring:
• What is the percentage of truck capacity used?
• Outbound transportation cost as a percentage of sales
• Inbound freight cost as a percentage of purchases
• On-time pickups
• Time in transit
• Claims as a percentage of transportation costs
• Percentage of traceable loads
Benefits of an ERA Review
• Full analysis of current freight needs, practices and KPIs
• Improved efficiency and operations
• Optimised freight solutions for customer needs
• An ongoing audit of negotiated pricing
• Low impact on internal resources
• Improved bottom line, e.g. based on an 8% gross profit margin, an increase of $625,000 in sales would be required to match the same impact of $50,000 in cost savings
Why do you need us?
Matching the right supplier with the right service levels required by customers with the right costs is not an easy task.
Expense Reduction Analysts (ERA) have the expertise to evaluate and benchmark the many different methods of freight, which depend on the time frame, urgency and needs to be determined by the customer.