How many times have you budgeted for a certain amount only for your freight spend to far exceed it—with no clear explanation for the gap? Shippers tell us all the time that they thought they knew what they were spending, but the bills just don’t seem to add up.
The problem is not a lack of information (at least, not exactly). Most shippers have more data than they know what to do with—and that’s part of the problem. The truth is staring them in the face, but they don’t know how to tap into their data to retrieve it.
Before you turn to an expensive consultant, listen up. We’ve helped many clients wrangle their data and gain visibility, so we’ve seen it all before. Here are some of the most common causes of runaway freight spend that we encounter—and what to do about them.
You’re paying surcharges on top of your base rates—but you can’t see them.
Just because you signed a contract with a carrier agreeing to a specific rate doesn’t necessarily mean you know what you’re paying them. Many shippers we’ve worked with believed they were getting a bargain—until they drilled down into their freight spend, that is, and discovered how many surcharges they were amassing.
Without auditing your freight on an ongoing basis, this will always be an issue. Outsourced freight audit and payment services can alleviate the burden on your staff and put dollars back in your bottom line by flagging unnecessary expenses like missing discounts and duplicated freight bills. But auditing can also provide some much-needed visibility into your spend with each carrier, allowing you to approach contract renewals and negotiations from a place of clarity.
Your data isn’t normalized—so insights are slipping through the cracks.
Inconsistent data is a huge barrier to visibility for countless shippers. Maybe one supply chain manager is identifying modes slightly differently from the rest, and nobody has noticed. Or maybe their operations are international, and some suppliers send invoices in English while others don’t. It’s impossible to track data consistently when some invoices say Munich and others say München—and without consistency, your visibility will always be murky at best.
There are two ways to deal with this problem, and a combination of the two is usually advisable. First, aim to create uniformity—among your suppliers, carriers, and staff—by providing clear instructions around invoicing and documentation. Second, to account for any mistakes or oversights, put processes in place to automatically swap out inconsistent data. When you work with us, we can help you create processes to standardize data across your organization—giving you true visibility, not misleading half-truths.
You haven’t benchmarked in a while—so that bargain isn’t a bargain anymore.
When shippers are unable to unlock the insights concealed within their data, this can create a snowball effect—where a higher-than-expected freight spend only grows worse over time. And a big reason for this is the inability to benchmark on a regular basis.
When shippers can’t tell whether what they’re paying is in line with current market rates, they can’t make smart decisions about when to switch carriers and suppliers. They’re also unable to confirm whether their spending is on par with their biggest competitors. For example, it’s entirely possible that a competitor using the same lanes and carriers is paying a fraction of the price because they’re more aggressive about benchmarking and negotiating. And the longer this continues for, the more opportunities that business has to inch ahead.
Our robust business intelligence tools and modeling capabilities make it easy for shippers to understand what they’re paying now and perform frequent benchmarking. This puts them in a strong position to return to the table and negotiate for the rates they deserve.
Take control of your freight spend.
At CTSI-Global, we believe in three things: information, information, and information. The more data a shipper has and the easier it is for them to drill down into it and extract vital insights, the better their processes, decision-making, and savings can be.
Our capabilities and expertise extend far beyond freight audit alone. We can help you visualize and analyze your data to make more informed decisions. And since we’ve worked with shippers of all shapes and sizes, we can provide insights into what’s worked for other companies to help you transform your processes—and bring your spend down.
Don’t let your freight spend get away from you. Contact us today, and let’s get it under control.