Cheap is not always best: How to get performance and value for your

Transcription

1 Cheap is not always best: How to get performance and value for your presented by Shannon Vaillancourt

2 Less-than-truckload (LTL) Tender shipments that optimally match your carriers network Full Truckload Take advantage of carriers with backhaul opportunities Inbound Routing Empower suppliers to make the optimal transportation decisions Mode Determination Utilize real-time rating to automate mode determination

3 Carriers submit pricing off one common rate base with state to state or regional discounts Carriers submit pricing based on highest cost in lane and city groupings Shippers compare discounts by hand to award a state or region to a carrier 50,000 (lanes) + 3 (carriers) = 50,000 total lanes X % Y % Z % Common Rate Base 50,000 lanes Lane Awards & Final Pricing common rate base = less flexibility for carriers fewer lanes = greater risk for carriers Less aggressive pricing for shippers

4 Carriers are provided with one year of historical data with exact lane and product details Carriers submit pricing on their own rate base with zip-to-zip discounts & floor charges Shippers utilize predictive analytics to model data and determine proposal outcomes 500,000 (lanes) x 3 (carriers) = 1,500,000 total lanes ABC % Carrier s Rate Base 500,000 lanes Predictive Analytics Engine XYZ % Carrier s Rate Base OUTCOME 1 OUTCOME 2 Lane Awards & Final Pricing 500,000 lanes OUTCOME 3 JKL % Carrier s Rate Base 500,000 lanes greater flexibility, more lanes, less risk = more aggressive pricing for shippers

5 Carriers enjoy a uniform profit level, shipper enjoys sustainable rates Provides carrier with tangible results, i.e. Do X get Y More of a collaborative approach Analysis tells carriers the exact discount level required to receive the amount of freight they want Objective approach provides carrier with assurance that the amount of freight will be obtained New process puts you in lockstep with the carrier Carrier s rates are lowest in the lanes they operate efficiently One carrier s low cost lane may be another carrier s high cost lane Carriers are now hauling freight that fits their wants which results in lower costs to you

6 Shipment from Cranbury, NJ to anywhere in Indiana Common rate base has 7 distinct lanes Carrier X has 24 distinct lanes ($0-$10 price range) Carrier Y has 75 distinct lanes ($14-$32 price range) Carrier Z has 21 distinct lanes ($0-$54 price range) Zero-Sum Game Carrier X Aggressively prices based on $0 lanes carrier loses Conservatively prices based on $10 lanes shipper loses Carrier Y Aggressively prices based on $14 lanes carrier loses Conservatively prices based on $32 lanes shipper loses Carrier Z Aggressively prices based on $0 lanes carrier loses Conservatively prices based on $54 lanes shipper loses

7 Common rate base has 7 distinct lanes Carrier X has 21 distinct lanes ($0-$54 variance)

8 Shipper & Carrier wins Win-Win Have carriers price based on their rate base Tender freight to the carrier that is lowest in the given lane Freight is inexpensive in the lanes that the carrier wants, i.e. operates well in Reduce your freight spend using the same carriers you use today

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10 » All spot quote shipments regardless of mode can be auctioned off to carriers & brokers Reverse Auction Platform Ensures lowest cost solution Ability to audit all spot quotes Minimizes work at Branch level One time input No calling carriers Easy to find lowest bidder Auction Timed to maximize results Results can be leveraged in the future Initial bids level set on market intelligence 5-star rating system Carrier Development Simple to expand carrier base Access to additional Truckload Capacity Attract high quality, high capacity carriers Take advantage of dynamic backhaul opportunities

11 » Truckload Auction Examples

12 » Provide automated tools for all suppliers to fulfill purchase orders and optimize shipping costs Benefits to Shipper & Supplier Optimize mode selection between parcel, LTL & Full Truckload shipments Optimize inbound and 3 rd party shipment carrier selection Supplier prints parcel labels, Bills of Lading and custom packing slips Visibility to open and fulfilled purchase orders through dashboard KPI Integration with ERP or WMS Access key Purchase Order details such as parts, quantities, and reference numbers Automated shipping feedback eliminates manual communication processes View entire shipping history and re-print shipping labels & documents

13 » Utilize a real-time rating engine to determine mode rather than static elements Weight Pieces Mode > 150 lbs. > 15 pieces LTL 150 lbs. 15 pieces Parcel Traditional Method Mode Determination through Real-Time Rating Optimize mode selection between hundredweight and LTL shipments Allow TMS to plan shipments based on given day or wave of orders Replace the inbound routing guide with an inbound portal that determines mode Use deliver-by-date logic to enforce cost and service business requirements

14 Savings Key Performance Indicator (KPI) Calculate before cost to measure savings Freight Savings (k)

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16 Lost Savings Key Performance Indicator (KPI) Calculate optimal carrier to measure lost savings View your trend over time Identify what is preventing you from achieving your goal Lost Savings (k)

17 Drill down to the details to see the exact shipment(s)

18 Cheap is not always best: How to get performance and value for your presented by Shannon