Freight Auditing Process Step-By-Step
Priority Logistics functions more like a shipping co-op than a traditional logistics company. We’re full service — sea, land, air, fulfillment, etc, but rather than selling to you, we represent you in the shipping marketplace and develop a freight strategy that lowers your cost and shortens shipping times.
Instead of taking a traditional markup approach and simply squeezing the rate a bit to get your business, we start from scratch and negotiate on your behalf the best rates with the best carriers based on your cargo and shipping patterns.
We eliminate those high margins disguised as “discount rates,” and the literally hundreds of tiny charges that add up to big bucks at the end of the year. We don’t make money unless we can save you money. There is no cost or obligation to see if this approach can work for your company. [Read more...]
Are You Paying Too Much for Inbound Freight?
While it’s true that most companies aggressively manage outbound transportation, too often inbound transportation costs are not controlled. However, as more and more companies face a need to reduce expenses during this challenging time, total transportation cost control is heating up as a top priority for upper management. The pressure for cost reduction points squarely to managing transportation in both directions. Because it has long been ignored, savings opportunities in inbound transportation are typically higher in percentage than in outbound transportation and, very often, in total dollar amount as well.
Most purchasing agents fail to consider that suppliers use their outbound transportation departments as profit centers, not as cost centers as many believe. What does that mean? It means shippers (your suppliers) are using their negotiated carrier rates and your package volume to fatten their bottom lines. In fact, you are probably doing the same thing to your customers! I can count on one hand the number of clients that I’ve had over the years that passed their discounted rates on to their customers. [Read more...]
Case Study: Eiko, Ltd.
Optimizing Existing Business and Establishing a Pathway for Rapid Expansion Results
- Overall freight transportation expenses reduced by 43%.
- Carrier compliance improved from approximately 50% to 100%.
- Damage claims reduced from over 2% to less than 1%.
- Delivery lead times enhanced from approximately 3-5 days to 1-3 days.
- Importation program planning to move from United States to Mexico for additional savings.
Eiko, Ltd. is manufacturer of lighting products under several popular brands serving a multitude of clients across the audio and video, photographic, automotive, medical and dental, electronic, industrial and electrical industries. Eiko was focusing on rapid expansion while concentrating resources on its areas of expertise, and needed to utilize capital more efficiently to subsidize its expansion plans. As new business development became a priority for Eiko, new competitive advantages were needed to gain market share. Priority Logistics was consulted to analyze existing freight transportation and logistics practices and provide recommendations to enhance expansion initiatives.
Eiko sought to overhaul its existing freight transportation program with a comprehensive set of modifications and new initiatives, and turned to Priority Logistics to provide assistance in achieving the following objectives:
- Optimize freight flow activities between many facilities/locations.
- Consolidate shipments to minimize unnecessary expenses.
- Eliminate excessive assessorial fees and freight misclassifications.
- Establish regionalized distribution centers for better efficiencies.
- Eliminate inefficiencies created via improper use of carriers, modes, and routes.
Upon completion of its analysis and alignment of recommendations with Eiko, Priority Logistics implemented a series of initiatives to address every objective. A standardized set of criteria for mode and route selection for multiple facilities and locations ensured optimization of freight movement and consolidation of shipments. Favorable changes to existing freight contracts and an ongoing auditing program guaranteed Eiko would no longer be victim to overcharges. Tactical planning and lease negotiations for new and repositioned distribution centers minimized long and expensive hauling of freight across the country. New procedures implemented at all levels and locations within the company ensured all employees adhered to guidelines aimed at maximum efficiencies.
Case Study: Nitto Denko Automotive
Nitto Denko Automotive is a top manufacturer of an innovative and comprehensive line of acoustic and sealing materials for both automotive and industrial applications.
- Overall freight transportation expenses reduced by almost 30%.
- Carrier portfolio reduced from over 30 providers to 8 providers.
- New revenue stream equivalent to 3% of all LTL freight costs established.
- Shipments between Mexico & United States cut from 10 middlemen to 3 middlemen.
- Delivery lead times improved by more than 50%.
Download the Nitto Denko Case Study
Why Challenge Transportation Costs?
. . . Because the numbers are huge.
On average, freight transportation costs exceed 50% of total logistics expenses for organizations handling products. Freight transportation costs can vary as much as passenger transportation costs. There are literally hundreds of variables that impact the bottom line cost you pay. This leaves an opportunity to uncover savings using our unique methodology.
Lack of standardization and industry regulation causes confusion and inefficiencies and burns working capital. Our experience bears evidence that most companies can realize a 15% to 50% savings with NO change in their existing program or comprising service.
Learn how the Freight Savings Program works.
Priority Logisitics Model Makes Saving Money its Priority.
From the Kansas City Business Journal, July 19, 2009
Following a unique business model, one local logistics company has increased its revenue and customer base despite the turbulent economy.
"We are a straight paid-by-performance company," said David Burdick, vice president of Priority Logistics Inc. "In other words, we don’t get paid unless our customer saves money." [Read more…]