Freight Shipping Blog

Best in Class Freight Cost Management Practices- How Does Your Company Compare?

Posted by Robert Snowdale on Wed, Dec 05, 2012 @ 12:07 PM

Hey, Freight Costs are not my worry-I am told by our shipping manager that we have GREAT freight rates. Of course every shipping manager thinks they have great freight rates but how competitive are they? How do they compare with other similarly sized companies in similar industry sectors? 

To find out how your company compares to others in your industry sector in terms of Supply Chain Costs as a percentage of sales click here.

The old and very true adage goes "if you’re not measuring it, you’re not managing it." Assuming your company has some measurements in place, how do you know if your measurements merit a slap on the back or a well-placed kick?

Large, well run public companies expect every line item expense to be managed from a Best in Class approach. Entrepreneurs and their employees in smaller, privately held businesses may think they stack up well against their peers--even as they lose market share month after month to competitors who can offer similar products at a better landed cost. 

We are DSi, and this is our 24th year of working with small to medium sized companies to improve the responsiveness of their logistics performance and to provide guaranteed freight savings using name brand carriers that meet or exceed client specific service requirements.

Best in Class Operating Practices

Here are six operating practices that can help you achieve a Best in Class level of Freight Cost Management within your company:

  1. Establish "Business Rules"- what does it take to be a freight carrier in good standing for your company?
  2. Conduct annual bid processes using a Uniform Disclosure Document with all qualified carriers leveraging all available volumes, inbound, outbound, third party.
  3. Select and award business on a one year contract to a right-sized Core Carrier Group (the Goldie Locks approach- not too many, not too few).
  4. Establish current Benchmark costs for all modes of transportation.
  5. Implement and distribute Routing Guides for all shipments, and measure and report compliance with those guides.
  6. Measure performance against Benchmark costs, Routing Guides and Business Rules through Freight Audit, Payment and Management Reporting services.

How Do I Get Started?

Most small to medium sized companies do not have the resources to bring a Best in Class management approach to this key line item expense, nor are they able to measure and report performance in this area. 

Call us today at 508-747-6200 to find out more about how we can help you to achieve Best in Class performance in this area.


“Best in Class”- Definition: "The highest current performance level in an industry used as a standard or benchmark to be equaled or exceeded.

Topics: freight cost management, best in class, supply chain costs

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