Tuesday, May 21, 2013

Expense Reduction: Freight & Shipping Cost Management

Freight and shipping costs are expense reduction targets for most large companies and the “bull’s eye” for those involved in manufacturing, retail and distribution.

Freight cost management is a moving target that keeps operational managers asking:

  • Are we leveraging our buying power or fragmenting it across departments, business units and a variety of shipping, freight and other logistics providers?
  • Are we working with the right freight carriers under the right terms?
  • Are we being invoiced correctly and consistently for freight and shipping services?
  • Are we incurring rogue expenses outside our contracted carriers and rates?
  • How do our freight and shipping costs compare to other companies?

Meanwhile, shipping and receiving staff is dealing with day-to-day concerns like damaged freight, missed pick-ups and late deliveries.

Meeting Freight and Shipping Service Expectations at Lowest Cost

When it comes to freight and shipping expense reduction, LAC Group works with clients to make sure their service level expectations are being met at the lowest cost using a variety of mechanisms:

  • Basics – Identifying how and where to make adjustments by understanding what is taking the most time and where money is being spent on shipping and freight.
  • Contracts – Reviewing and analyzing shipping contracts to clarify complex language, flag potential problems and identify opportunities. Guiding clients through the contract process by negotiating directly with freight carriers and other logistics providers or making sure they receive the best terms and conditions.  
  • Benchmarks – Evaluating what our clients spend on freight and shipping in comparison to industry standards and other relevant benchmarks.

Reduce shipping and freight expenses saves our clients time and money, yet I think an equally important benefit they believe they gain is support. We make it our priority to care about their business. We give them peace of mind, knowing our people are educated and experienced in contract language and negotiations. We understand and apply freight and shipping benchmarks and standards that give our clients the assurance that their terms, conditions and service levels are at or above par.

Freight and shipping make up a considerable portion of the overhead expenses for many corporations; as such, they provide ample opportunity for expense reduction. And because of the dynamic nature of fuel costs and other transportation factors, even businesses that have been diligent about freight management can benefit from a fresh look, especially when coming from the objective and experienced eyes of the professionals at LAC Group.

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