Millions of packages are shipped daily across the U.S. in a massively intricate web of supply chain ecosystems.
At the company level, shippers deal with highly complex supply chains of their own. For example, a retailer may send thousands of orders daily across the globe, and all of these orders have variable requirements that must be considered before products can ever leave a warehouse.
A shipper must consider factors like:
- When does the shipment need to be delivered?
- Is the product fragile?
- Is the product perishable?
- What packaging does it require?
- How will the customer receive it?
- What carrier is going to transport it and what will it cost?
While shippers are experts at fulfilling and coordinating order distribution to get products into customers’ hands as quickly as possible, one of the longest-fought battles they’ve faced has been to keep supply chain costs in check while maintaining service quality.
There are countless common errors and missed opportunities that crop up during supply planning, merchandising and transportation coordination. These occurrences drive up costs without a business even knowing and leave money on the table.
For example, how many times have you ordered a small item online only for it to end up in oversized packaging? While this mistake may be inconsequential if it only happens rarely, left unchecked it becomes a drain on resources and eats up valuable space in trucks.
But this is only one aspect of transportation spend. A company could foot the cost due to billing errors, invalid surcharges and accessorial fees that result in overpaying.
Carrier agreements can also drive up costs if critical details are missed, such as when a shipper renews an agreement with a carrier and certain discounts aren’t carried over, causing lost savings.
Other times, a carrier could breach a service guarantee if it doesn’t deliver in the stated time period, and a shipper may never know. Missed delivery windows can seriously dent the image a customer has of the service it ordered from, even if the shipper isn’t responsible for the carrier’s delay. Because shippers work with many carriers, without close oversight of these guarantees, a shipper could lose out on refund opportunities.
All these common operational inefficiencies can massively impact a shipper’s bottom line — and many shippers aren’t sure where to start to tackle these problems.
Transportation spend optimization is a shipper’s secret weapon to transform its spend management process, improve inefficiencies, and reduce complexities and operational risk.
What is transportation spend optimization?
Transportation spend optimization is a strategy for improving operations while reducing expenses across a business. It is accomplished by using actionable data insights of an organization’s cash flow and applying streamlined processes, driving better business outcomes.
This is possible with a central place to access business intelligence across carrier sourcing, planning and execution, freight bill processing, and freight bill payments.
A single system allows companies to better identify inefficiencies across its operations and, most importantly, take steps to solve them.
Körber Supply Chain is on the leading edge of freight audit and payment, but that’s only part of the picture. It also provides strategic transportation sourcing and delivery performance services. Its transportation spend optimization services and solutions are a broader answer to the shipping industry’s need to strengthen vendor and customer relationships, enhance delivery performance, and simplify the transportation spend management process.
For many years, freight audit and payment services in particular have needed to catch up with the rapidly changing architecture of the supply chain landscape. Transportation Spend Optimization is the first real change in over a decade.
Its combination of transportation consulting, technology solutions and market leadership facilitates a tailored and impactful way for shippers to drive optimization and reduce costs across their business.
To learn more about Körber Supply Chain, click here.
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