Without a doubt the hottest topic I've discussed with shippers over my past 18 years in the transportation space is the lack of control people feel they have within their inbound logistics operation. Many people seem to think they are getting scammed by costly prepaid and add programs or played a fool by vendor's "free freight" program. And they have good reason to feel that way because it's been my experience that many times they are.
There are two bits of research that I believe are the best kept secrets in business today. First, according to Boston-based AMR Research, the average total return of companies in AMR's "Supply Chain Top 25" in 2007 (which included companies like Apple, Walmart, IBM, Johnson & Johnson, etc.) was 17.89%, compared with returns of 6.43% for the Dow Jones Industrial Average and 3.53% for companies in Standard & Poor's 500 Index. The second bit of info is from a Georgia Tech study that show supply chain glitches can all but destroy shareholder value. They indicate the total shareholder value loss associated with a glitch can be as high as 25%.
A few weeks back I was reviewing some shipping data with a client. I was simply highlighting all of the times they shipped on the same day to the same customer and calculated the windfall of savings they would have realized if they easily combined these orders onto a single shipment. My client was floored because, although he admitted his company might not be the best at combining shipments, he didn’t think the premium he would be paying was as high as it was. But it was and considering this was happening several times a week and could cost of tens of thousands of dollars a year in extra transportation costs if it continued…thus inspiring this week’s Freight Savings Tips article.
It usually depresses company leaders when they find out how much effort their own people are spending tracking and tracing shipments. This activity can be a massive time suck for customer service reps, purchasing folks, shipping people and sales men and women. The kicker is that it can be totally automated with KDL's simple event notification tool and tracking panel.
Something prospective clients tell me they desire more than anything is visibility. They want visibility to data, visibility to shipment tracking information, visibility to documentation, etc. The more visibility the better. When we start showing them all of the meaningful information we can put at their fingertips, they typically get googly-eyed! Having access to all of this information can help skyrocket a company past their competition. But one thing companies forget to do is actually make all of this visibility actually visible for people to see.
What if I told you you are paying good money to your employees to stand with a phone up to their ear on hold for hours-upon-hours a day? I'd imagine you'd be upset, right? Well, guess what? If your company regularly ships product with freight companies you are spending your hard earned revenue dollars on just that...for your employees to wait on hold.
When considering partnering with KDL to assist them with the management of their logistics operation, most companies face two questions. Do they hire KDL or do they do it themselves. Coming up with the answer to this question is easier than they think.
Due to the nature of our sales cycle at KDL, our sales team spends the bulk of their time teaching and educating prospective clients about the logistics industry and answering a lot of questions. Much like payroll, human resources and IT, there are a lot of nuances and regulatory considerations in shipping that many companies just don't have the in-house skill set or the right technologies in place to stay ahead of the curve.
On November 18th, 2016 UPS implemented their latest general rate increase. On January 2nd, 2017 FedEx issued their latest installment of their rate hikes. Since both of these companies basically control the market share of this $100,000,000,000 U.S. parcel space, these cost jumps are effecting just about every company who ships anything in this country.
The above Transportation Services Index measures the movement of freight in the U.S. This data is collected by the U.S. Department of Transportation (DOT) and put out by the Bureau of Transportation of Statistics to give insight and visibility to the public about the transportation climate.