The 2:00 Minute Warning

Last week, our Two Minute Warning message highlighted how having great data is one of three key practices for reducing freight costs. Some of you asked us to elaborate on that and address how having great data can reduce your transportation costs - even when carriers are raising their rates.

This is a topic I have addressed over the years in a presentation I have given to several different industry groups which raises the question: “Is your freight payment process an asset or an anchor?”

Here are some key points in this presentation. First, not all data is accurate! Let’s be blunt! There is great data, good data, and bad data. And the quality of logistics data is directly impacted by the quality of the data derived from the freight audit and payment process.

Second, there is an enormous difference between shippers who think transactionally and want to get their bills paid and audited as cheaply as possible, and strategic shippers who want accurate payments and great data. Strategic shippers know that integrating their freight payment process with their ERP and TMS platforms can produce accurate and comprehensive data that can be a “game changer” that gives them a sustainable competitive advantage. 

Add it all up and you see that transactional shippers see freight audit and payment as an expense and an anchor. Strategic shippers see their freight payment and audit process as an investment and an asset.

Why is this focus on great data so important? For starters, if you don’t have great data about what’s really driving the costs, you’re guessing. When it comes to understanding significant variances in actual freight costs, auditing your company’s own performance-to-plan, or addressing root cause issues and remediation programs, do you really want to be guessing? 

Having great data allows you to plan effectively and be proactive about what’s ahead. I’ll give you an example. On June 30, New York City was going to implement a congestion pricing mechanism – as high as $54.00 for a large truck. The governor has put it on hold for now. But how much would that have cost your company? If you have great data about your freight patterns, you can determine how many deliveries you made in that area and how to analyze your potential cost impact.

Or, if you are a parcel shipper, with UPS and FedEx constantly changing their delivery zones and adding significant and varied accessorial charges, it begs the question, how will this financially affect you? With great data you can answer that question. Beyond answering that question, great data can help your company optimize its transportation spend management and network performance.

Whether it’s negotiating the best rates and service levels with your carriers, or understanding your company’s cost to serve customers, great data provides you with opportunities. So, if you are like many of the CEOs, I have spoken with those who want their companies to optimize costs and performance in a significant way, let’s talk.

On the freight audit and payment front, if you’re paying too much, questioning your process, or just aren’t getting great data, TranzAct can help turn your freight audit and payment process from an anchor to an asset. We have decades of experience, are recognized by FedEx as being a Certified Freight Bill, Audit, and Pay (FBAP) Provider and we can quickly assess your current processes and develop a significant value proposition for you.

To learn more, simply give me a call at 630-530-6190, send me an email, or schedule a meeting with me.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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