Even with rising freight rates, you can still reduce costs and improve your profitability!
Oct 25, 2018
If you’ve watched our most recent Two Minute Warnings, we've highlighted comments from Derek Leathers (Werner's CEO) where he noted that even in an environment where freight rates are rising, shippers can still lower their freight costs by addressing the inefficiencies within their own organizations. According to Derek, every shipper has at least a 5% inefficiency factor that results in higher freight costs.
When we addressed this in last week's Two Minute Warning it really "lit up the score board!" Several of our viewers followed up with me and wanted to know: "How can we offset the impact of rising rates and bring our freight costs under control?"
Before answering their question though, I like to ask these folks a few questions that help us gauge whether they are serious about managing their transportation costs. Here are some examples:
Do you have a transportation spend management plan in place that is written and documents your priorities?
Are your goals and objectives shared throughout your organization?
Do you have metrics that allow you to gauge your performance level?
Invariably, if the answers to these questions are "No, No and No!" then I have to break the news to them: "You're not really serious about reducing your freight costs. You have no written plans, no defined priorities and no metrics to evaluate/measure your performance."
So the first step on the journey to lowering your freight costs begins with an exercise in self awareness. We have a quiz about being a transactional vs strategic shipper that we like to share with shippers who are serious about controlling their freight costs. It addresses these questions and will give you a starting point for having a dialogue within your company on the steps to take to reduce your freight costs.
So instead of just accepting the fact that higher freight rates are just a cost of doing business, wouldn't you rather be proactive and put together a plan to identify and realize cost savings?
In addition to the quiz, we can provide valuable insights and conduct an in-depth assessment of your transportation practices and processes and how they impact your freight budgets. We call this our Rapid Assessment and have helped many companies achieve amazing results through the process. If you’re stuck or could simply use help, we encourage you to get in touch with us to learn more.
We provide all of this because we’re on your team, here to help and passionate about seeing you be successful, no matter how challenging the transportation environment.