.Are you Paying Too Much for Your Shipments?
Posted in the Transportation Forum
Since: Jan 10
#1 Sep 30, 2012
When was the last time you analyzed your actual carrier costs? If you havenít reviewed your carrier activity during the past year, thereís a good chance you are paying higher than originally contracted fees and, possibly, above market rates.
Competition for static transportation resources by shippers has prompted many carriers to initiate across-the-board rate increases. At the same time, rising fuel charges continue to escalate carrier surcharges. And with limited transportation resources available to support increasing freight demands, shippers like you may had to occasionally contract more expensive drivers to get goods transported on time. As a result, your freight costs may be higher than planned and represent a more significant percentage of delivered price.
To remain competitive and understand actual transportation costs, chemical shippers must gather market intelligence on their own networks to get an accurate picture of how they are buying in the market. By reviewing shipments history, carrier agreements and freight invoices, a benchmark study can reveal what was actually paid to a carrier on a per shipment basis. And by comparing this data to market trend costs for shipping goods in specific traffic lands and geographic regions, a benchmark can determine if you paid best in class rates or too much with specific carriers.
Through this analysis, the benchmark study can provide insights on the competitiveness of your companyís freight rates. It can also serve as a basis to negotiate significant improvements to your own carrier agreements and standardize corporate rates associated with accessorial charges such as fuel surcharges and unloading costs among your carriers.
However, compiling and analyzing this data requires a significant investment of time and resources as well as access to competitive carrier freight rate and lane imbalance information to which most shippers donít have access. Thatís where a transportation consultant, such as ChemLogix, becomes invaluable. Possessing market intelligence, an established carrier network as well as a dedicated team focused on this work, a third party logistics provider (3PL)- familiar with your industry - can conduct a thorough benchmark study faster and more cost effective than many in-house logistic departments who donít have the available resources or experience for this endeavor.
Using benchmark results, 3PLs can take you to the next step in negotiating rates with carriers for service in specific lanes and regions and identifying new sources to replace those that have priced themselves too high for your business. To find out more about how benchmarking can provide you with the tools and analysis to mitigate rising carrier costs, contact us at [email protected] or visit our web site at: http://www.chemlogix.com/solutions/freight-pr... .
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