Instability is among the singular constants affecting supply chain management. Finding ways to keep costs in check often comes down to understanding the various shipping surcharges and how shippers can best avoid them through stronger shipping audits. Unfortunately, SKU proliferation, the growing complexity of transportation service providers, the globalization of e-commerce, and increased delivery expectations make that goal more difficult to attain. Even challenges in a singular mode, such as ocean, can have a compounding effect on other modes, including OTR transportation. As noted by Bloomberg, “The higher shipping costs have been sparked by a combination of factors, including soaring demand amid stimulus checks, saturated ports, and too few ships, dockworkers and truckers. The problems are too broad to be remedied by any short-term fix and are creating ripple effects across U.S. supply chains.” The long-term solution is the use of business intelligence and analytics to provide visibility and mitigate shipping surcharges regardless of their seasonality and rationale. In fact, let’s consider the top seven ways that advanced insights and a strong business intelligence resource can do just that.
1. A Single Source of Truth for Shipping Surcharges Management
Perhaps the biggest challenge affecting modern supply chains comes from the proliferation of different systems. There are platforms to manage transportation, warehousing, communications and virtually every process. That doesn’t even scratch the surface of the countless carrier portals and systems that your organization uses on a daily basis. Now imagine the differences that could cause massive confusion as new general rate increases take effect.
The variances in these platforms lead to many different data streams, making it difficult to track your actual expenses. Fortunately, a single source of truth that arises from a unified approach, leveraging cleansed and normalized data from all such systems, can make it easier to understand your costs. Additionally, the normalization of data ensures actual, meaningful comparisons between reporting across platforms relying on different standards for coding and reporting of all shipping surcharges and associated expenses.
2. Leading KPIs to Track Performance Across All Modes, Channels, and Providers
The application of a single source of truth in data management and analytics depends on actionable insights. That’s a sophisticated way of denoting how easy it is to understand actual impacts and the steps necessary to achieve an optimum result based on historical data paired with the ability to model future impacts to truly understand cost impacts to your business. Tracking these variables across individual metrics and KPIs provides a baseline and benchmark to help shippers know what’s happening, where and why. This is especially important in tracking performance and surcharges across multiple granularities, including mode, channel, provider, service level and region. These KPIs naturally improve visibility into costs and help shippers find the low-hanging fruit of improvement in shipment execution.
3. Identifying Opportunities for Improvement to Lessen Surcharge Impact
Another critical way to maintain control over shipping surcharges rests with the next best action based on data insights. Advancements in business intelligence and analytics give rise to predictive capabilities to understand what’s expected to happen based on current trends and prescriptive insights to arrive at the right result. Combined with analytics that provide insight into the past (in other words, descriptive analytics), it’s easier for shippers to identify opportunities for improvement that lessen shipping surcharges, proactively making decisions that would help mitigate surcharge increases, delivery exceptions, and lost or damaged packages based on data driven insights. Further, this helps shippers continuously optimize their resources and transportation networks to get the best rate without sacrificing service levels.
4. Carrier Accountability and Performance Management
Carrier accountability and performance management come together through the use of actionable insights to ensure shippers’ billed costs are reflective of actual expenses incurred. This bridges the divide and begins to emphasize the need to track performance from both an actions and billing point of view. Such insights can help shippers identify when it may be necessary to leverage zone skipping or hub injection to blend the carrier mix and derive lower shipping costs. Actionable insights, derived from data that has been ingested, cleansed, normalized, corrected, and analyzed, help give shippers a new way to hold all partners accountable. And some freight audit and payment companies have also successfully expanded on this capability through advisory services to further those goals.
Lower Shipping Surcharges With Intelligent Audit to Succeed
The risk of shipping surcharges is not going to end when peak season subsides. Even as the industry evolves to accommodate the massive growth in e-commerce, there will always be a need to consider shipping surcharges, such as residential delivery or fuel surcharges. As a result, the best strategy for shippers rests with using data-driven management and integrated systems to create a complete, fact-based approach to managing every shipment, in every location, and regardless of what carrier contracts or expectations are in place. Connect with Intelligent Audit now to learn more about how your organization can reduce its costs through world-class cost transparency and data-back insights.