When It Comes to Managing Freight Costs: Are You in It to Win It?

Mar 17, 2021



The Code Red conditions in the freight markets are proving to be stressful for shippers. Similar to what happened during the “Perfect Storm” of 2018 when higher freight costs also walloped bottom line profitability, we are seeing and talking to C-Level executives who are “getting religion” about the value of having expertise in the supply chain and freight management areas of their companies.

And that is why I was recently asked to host a session for CEOs and presidents to share some insights about how these Code Red conditions are affecting their operations and profitability. I’ve also had some “difficult conversations” with C-Level executives about their personal support as a champion for the freight and supply chain areas.

For example, I had a conversation with a president about his company’s supply chain and freight management capabilities. After listening to him share his frustrations, I asked him a simple question:

“Is it important for your company to have a great supply chain?”

His response was the same response I get from almost every C-Level executive when I ask that question: “Of course it is.” Then I asked him what I call the “Prove It” question: “Can you tell me what you and your team have done over the past 12 to 24 months to build a great supply chain and improve your freight management capabilities?”

The response? Crickets! He had to acknowledge that they haven’t been giving these areas the attention they need. Truthfully, he has lots of company!

Over the past couple of years, I’ve lost count of the number of C-Level executives who have told me how important supply chain and freight issues are to their company. They all want great supply chains, but in truth, they are willing to live with average, or in some cases, even mediocre supply chains. And the reason for this is because they are not in it to win it!

Obviously, this observation can cause some discomfort. Which is why we remind these executives that having great intentions about the importance of supply chain or freight expertise isn’t enough. Great supply chains don’t happen by accident, they happen by design!

If your company isn’t willing to invest in building your capabilities in the freight and supply chain areas, don’t be too surprised when times like today’s Code Red conditions or the Perfect Storm of 2018 hurt your bottom line profitability.

After sharing these thoughts with this president, he asked me what his company could do to get their arms around spiraling freight costs. I shared three things his company could be and should be doing.

  1. First, stay on top of what’s happening in the freight marketplace. We offer lots of resources for companies to do just that. And along with the data you can get from great companies like FTR, or FreightWaves, it’s easier than ever to stay informed.

  2. Second, understand your company’s current capabilities and assess whether they have the support they need.

  3. Third, support your team by investing in the technologies and tools required to build and run a great supply chain.

I know there are other C-Level executives who like my friend may be asking: “Where do we begin?” The answer to that question will be different for each company. But one thing that every company could benefit from is our diagnostic Rapid Assessment process. It has proven to be extremely valuable for companies that want to truly understand their supply chain and freight management capabilities and strategies for operating in any type of freight market.

So, if your company is really "IN IT TO WIN IT!" when it comes to having an excellent supply chain and freight management capabilities, send us an email or give us a call.