A Handbook of Freight Management Secrets – Savings, Service and Supply Chain Continuity
Executives face constant pressure to jettison costs wherever they can in their business. It takes more than getting three quotes and picking the best one. In fact, it is really ineffective doing it this way. The quotes you are getting are all equally bad because everyone knows you are merely going through the exercise for the sake of it.
There is one more reason – we will come to it later.
You know, I know, and everyone else who is experienced in freight management knows that freight buying is in-fact very complex.
Bosses and peers assume freight buying is simple and piece of cake.
IF YOUR FREIGHT COMPANY STUMBLES EVEN ONCE, YOU WILL NEVER STOP HEARING ABOUT IT
You know what happens when your service provider trips over even once. That constant reminder by your peers, you customers, and perhaps even your own boss, reminding you about that one time.
Not only that – your company can be exposed to onerous penalties for non-delivery. All because your freight company did not live up to its part of the bargain.
Remember those moments where you thought and were sure to have gotten the best price.
But then there is your intuitions telling you, “Did I really just get the best price, I could have got a lower price”. We have all been there.
FREIGHT MANAGEMENT BECOMES A 24 BY 7 JOB
You are on the hook to make sure that the whole shipment goes through smoothly end to end. But there they are, the unexpected calls you get past midnight hours- hassling you about your packages, boxes, cargos, and even paperwork. Asking all sorts of unholy questions, pushing costs way above what you thought your company would pay.
END-TO-END SHIPMENTS – UNEXPECTED CHARGES INCREASE COSTS TO WAY MORE THAN ANTICIPATED
Count-less amounts of issues can occur in-between the whole end-to-end movement, matter of fact, more than 70 hand-over points exist in some shipments. Imagine how many things can go wrong.
All these issues blow up the costs – and your reputation.
A STRANGE MARKET – THERE ARE TOO MANY SHIPS AND TRUCKS, YET NEVER ENOUGH WHEN YOU NEED THEM
- Highly cyclical nature of freight cycles.
- Takes time to put more ships and trucks on the sea/road – inflexible supply in short term.
- Sellers try to create misinformation and shortages by manipulating perception to their advantage.
Strategic Sourcing is one of the worst methodologies to manage freight today
Yet consultants still try to tout it to senior management.
The resulting savings never really manifest – they are illusory.
A lot of money is spent on the consultants, a lot of activity is created, and the real freight costs remain the same in the end.
SHIPPING CONTRACTS – ARCHAIC PRACTICES, INDECIPERABLE LANGUAGE
Most freight contracts are one-sided, favour the freight companies and used as standard forms. The language is difficult to understand, and most of it is out-of-date with the current business reality and technology.
Yet buyers are forced to sign these things in order to continue to do business. You need an advanced degree in shipping law to JUST understand freight contracts.
Expediting requests are the single biggest cause of high freight costs
When your production planners, procurement, customers and production controllers make last-minute request to ship goods – little do they know the financial impact of this on freight purchasing.
Huge risks involved – Freight spend is almost indefensible in audits
When the invoices are impossible to reconcile against the contracts. Records of your rates and activities are not helpful in this situation. They are not precise enough for you to stand up to the scrutiny of proper audits.
This report was written not only by an experienced shipping industry veteran, but with the additional help of the best employees who worked in very high positions at the largest freight companies, as well as the largest shippers on earth.
If you want more information on this report – click here…