Freight shipping costs can take a significant bite out of sales revenue. The average cut is 10-11 percent for companies with revenues of less than $250 million and 2-3 percent for companies with revenues exceeding $9 million.
When it comes to reducing freight shipping costs, business intelligence tools are a valuable resource. The ability to evaluate performance and compare trends helps fuel actionable improvements that lead to long-term savings and success.
Here are some helpful business intelligence metrics to consider.
Use Business Intelligence to Reduce Freight Shipping Costs
In supply chain management, on-time delivery is an important principle. When timelines for freight shipment are not met, businesses are left with customer complaints and other avoidable issues like expedited freight shipping costs.
Poor on-time delivery is likely a symptom of larger issues like a lack of logistics technology or mismanagement of warehouse inventory. Implementing new freight service systems and solutions into your workplace can help realign day-to-day operations and achieve on-time deliveries.
Many of today’s warehouses operate at or close to capacity. But when the holidays or back to school season hits, their amount of inventory could double in a short period of time. This can result in an overcrowded space that is confusing and difficult to navigate.
Monitoring inbound and outbound shipment volumes helps organizations prepare for these peak periods. As spaces are better organized to handle the additional stock, operations can continue to move efficiently and make the business profitable.
Freight Expense By Location
While multiple branches may handle the same volume of shipments, their freight shipping costs might still differ. Without business intelligence though, citing these differences can be a challenging task.
Data provides insight into these issues and sets the stage for researching the problem and recommending improvements. For instance, you may find that improper processing of paperwork is to blame and recommend an automated method for handling freight payments.
When you invest in a 3PL service provider, you invest in the success of your supply chain. The key is to find a business partner that combines business intelligence tools with expertise to make your operations more efficient and maximize your profitability. For more details on what to look for in a 3PL provider, download our free checklist.