A Solution That Could Save You Thousands

Posted on August 11, 2010, 11:55 am, by Emily, under TMS For Shippers, Transportation Management.

Companies who use a manual system to select freight carriers could be paying thousands more than they need to be, and not even realize it. Carriers’ delivery estimates and prices from published rating guides can sometimes be inaccurate. Representatives at the company may have certain carriers that they favor, but those may not necessarily be the least expensive. Not to mention it’s a very tedious task to review all of those carrier contracts.

DC Velocity has profiled a few companies that have implemented automated transportation management solutions to manage carrier contracts and optimize the selection process:

[Perry Ellis International] chose a solution developed by Management Dynamics Inc. (MDI), a global trade management software provider based in East Rutherford, N.J. According to a case study supplied by MDI, the software has enabled Ellis’s logistics team to do side-by-side comparisons of carrier rate and service options and to calculate in seconds the total “landed cost”—the bottom-line charges for door-to-door delivery of an international shipment. In addition, the system’s auditing feature identified and resolved about $220,000 in overcharges showing on the bills of lading, the apparel maker says.

With potential savings like this, one might wonder why more companies don’t turn to automated solutions. DC Velocity cites price as a potential issue. However, this can be overcome by using an SaaS (software as a service) model, which traditionally offers lower up-front pricing, and no hardware to install.

Another potential roadblock companies may face when considering the automated route is familiarity:

Many shippers use manual processes because they’re easy to understand and that’s what they were trained to use. But with millions of routings in the marketplace and with carrier options becoming increasingly complex, the “easy” way is often not the best way, Comrie says. “The excessive freight charges [in manual processes] can be very costly,” he says.

Read more about the benefits of an automated solution at DCVelocity: Software that can help you make smarter moves.

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