Manufacturers and retailers spend millions of dollars a year on freight transportation. Freight costs can represent between 1 and 10 percent of a company’s operating expenses. Many companies treat freight costs as a necessary evil. Once a year they engage in an annual ritual, the freight bid or RFP. The current carriers are squeezed in their pricing; sometimes new carriers are brought into the mix if some incumbents haven’t performed. Shippers walk away thinking they have dome their jobs and optimized the value of their freight costs. They haven’t.
Every few years, shippers with a freight budget in excess of $1 million should conduct an independent audit of their freight programs. Just as businesses audit their accounting practices, looking for opportunities for improvement, Transportation departments should do so as well. You might be amazed with what you find.
There are four key components of well conducted Transportation Audit.
The following items are assessed in the audit:
The results of the audit provide a prioritized list of cost savings opportunities. They highlight opportunities to strengthen the transportation organization. The audit also provides a road map for improving processes and customer satisfaction.
Has your company conducted an audit of its freight operations within the past three years? Was your company able to reduce its’ freight spend and improve the performance of its supply chain? If so, please share your experiences with the readers of this blog. If you haven’t conducted a Transportation Audit, you may wish to give it some consideration.f the audit provide a prioritized list of cost savings opportunities. They highlight opportunities to strengthen the transportation organization. The audit also provides a road map for improving processes and customer satisfaction.
Has your company conducted an audit of its freight operations within the past three years? Was your company able to reduce its’ freight spend and improve the performance of its supply chain? If so, please share your experiences with the readers of this blog. If you haven’t conducted a Transportation Audit, you may wish to give it some consideration.