Transportation Data Rundown: How Much are Shippers Devoting to Logistics Costs?

Transportation and logistics can represent a hefty cost burden for shippers—especially with inflation and unexpected supply chain obstacles like driver shortages. But while high prices can touch supply chains and companies worldwide, not all shippers feel the same pain.

Many shippers are finding ways to lower logistics costs through advanced supply chain technology. By implementing a “best-in-class” logistics management approach—including full visibility, strategic automation, and a transportation management system (TMS)—shippers can see crucial cost and time savings across global shipping activity.

Transportation and logistics costs can range from 9% to 14% of total sales.

Like many spending categories, transportation and logistics costs vary from shipper to shipper. However, for companies that aren’t adopting a best-in-class management approach, the expenses generally represent 9% to 14% of total sales, depending on the shipper’s specific industry. These percentages include all logistics-related expenses—such as warehousing, dedicated personnel, and transportation costs—with transportation alone typically accounting for the vast majority. 

What exactly does it mean to implement a best-in-class approach? Simply put, this approach entails optimizing every step in the supply chain management process—from negotiations to carrier selections to routing to invoicing—and using advanced logistics software, like a TMS, to help you do it.

TMSs can produce significant transportation savings.

TMSs use automation and analysis to take the legwork out of logistics, saving time for employees, easing strategic decision-making, and identifying opportunities to lower costs. For every new order, this logistics software automates carrier selections based on the shipment’s required equipment, carrier prices and tariffs, transit times, and other factors. After analyzing costs and characteristics, the TMS can select the lowest-cost partner for the job. CTSI-Global’s Honeybee TMS even comes with a pre-vetted network of over 14,000 carriers to ensure shippers aren’t left hanging, even in the face of unexpected delays.

In addition to carrier selections, TMSs can perform load optimization—consolidating freight by size, weight, or destination—automate load tendering, and provide invoice processing and validation support to ensure shippers only pay what they have to. Shippers gain a supply chain management system that reduces manual labor needs, shipping costs, and opportunities for human error.

Tap into an approach that preserves profits and keeps your freight moving

Without an efficient and reliable approach, logistics operations can not only make a sizable dent in shipper budgets; they can have long-term consequences, from hurting customer relationships to damaging shipper reputations. Fortunately, optimizing end-to-end logistics management is more straightforward than many shippers may think—with a TMS doing most of the heavy lifting. 

With over 60 years in the business, CTSI-Global has devoted decades to building industry-leading technology like Honeybee TMS, simplifying and accelerating important logistics functions for shippers of all sizes and industries. The result of this powerful technology is a process that makes supply chain managers’ lives significantly easier, customer expectations achievable, and logistics operations more cost-efficient.

Contact us today to find ways to save—while giving your logistics team a leg up.