Improving your Freight Costs 2 – Required History

Phase-2: The method I am using here is to enable you to compare the potential costs of different Freight Providers if you deliver Nationally or at least over a two States. The savings or differences between Providers can be up to 53% (this is an actual figure from a project I am currently doing!).

Once you have the history file of all your consignments for the relevant period together and in a spreadsheet, you should also have all the data for each consignment on one line, with the different types of data in specific columns. You can now remove all the information (columns) that reference a customer or receiver’s name and address (referred to as “Consignee”, while you are the “Consignor”).

What should remain are the following columns:

Date, Consignment No, Destination Suburb, Destination Post Code, Actual Weight, Volume, Number of Pieces.

If you send consignments from more than one place, you will need to include the Sender’s Suburb and Post Code.

Your history file has now been de-sensitised, yet retains all the information required by your preferred/selected carriers (freight providers) to work out an appropriate quote. Now before you send this off, you need to decide what is important to you and your customers. Also be aware, you do not need to send this information to the carriers, you can always just ask for their rate-card, but this would mean you do all the work in the spreadsheet.

Phase-3 of the project is to make a list of the performance standards you will be asking your carriers to provide for comparison. You will also be asking for a copy of all their ancillary charges (these are the ones that can really hurt the pocket if you are not aware of them up front). Next time, I will give you a list of the standards I look for.

Improving Your Freight Costs – To begin

Whether you are a large company or a small one, if you use freight carriers you need to be reviewing the price you are charged and the service you receive on a regular basis. Best case scenario: this would be happening with all your suppliers.

Carriers, as with most suppliers, will over time become complacent, the service you are receiving slowly gets behind the rest of the market and your costs as a percentage of sales are not as good as they once were.

A review of your suppliers and a comparison with the market will tell you how much more you could be saving; then again it could also show you how much you are already saving (although this happens a lot less).

In my blog, I will explain the steps you too can follow to improve your costs and service.

This process can be informal by just requesting a quote or formal, using a detailed RFP process. Either way it is about stopping the leakage, it is also about improving the relationship you have with your service providers. So until next time, start reviewing what information and history you have now or where you can get it from.