Freight Management Case Study:

The Challenge

A manufacturer of consumer products contracted business Logistics with distribution throughout the U.S. and the world. Our assignment was to find ways to reduce freight transportation costs and to relieve workload pressure from employees who needed to focus on managing other critical areas of the business. The client used a mix of LTL, Truckload, Intermodal, Ocean, and parcel carriers.

Our Strategy

Our customized strategy for this client included these services:

1.) Conduct a transportation cost audit: In order to perform this work, we developed a database containing information regarding the company's freight transportation operations. The purpose of the database was to provide a view of the company's logistics operation, including manufacturing and distribution facilities, shipment volumes to and from these facilities, and the associated costs for these shipments. The database fields included information that was critical to our analytical process.

2.) Conduct cost benchmarking: We performed a cost benchmarking process, comparing the freight rates and charges paid by this client to rates and charges paid by other companies in similar situations. This activity involved accessing a large database of continually updated shipment information pertaining to thousands of other companies having both domestic and international operations. This benchmark process enabled us to identify many of our client's shipments that could have been made at lower costs.

3.) Prepare RFP for freight transportation services: We developed a customized RFP for this client utilizing our proprietary LogisticSmartTM technology that gives carrier and warehouse RFP respondents the information they need to provide the most competitive bids up front.

The RFP was submitted to a group of pre-qualified carriers. We evaluated the responses and determined the savings and service benefits that our client would realize under each carrier's proposed rate scenario, and presented this information to our client with our recommendations.

Results Achieved

We produced shipment routing guides for our client's use (both hard copy and electronic formats; the electronic version was added to the client's order processing systems and web site for use by vendors and company distribution managers). Using the most cost and service effective carriers noted in the shipment routing guides, our client was able to reduce its freight transportation costs by nearly 22%, or an annual savings of approximately $1.6 million.