Transportation or shipping cost management is a complicated process that requires many carefully planned and coordinated steps to be done successfully. One of the most critical steps occurs before any parcels are received, before any trucks move, and before any orders are delivered. That crucial step is shipping budget planning. Here are five things that transportation managers, supply chain directors, and shippers need to consider when managing the shipping budget.
Use of an Automated Freight Auditing Process or Software
Auditing the supply chain network and its transactions can be done in many ways thanks to today’s innovative shipping technology. The most effective means to accomplish the complicated task is automated data collection that captures all shipment transactional data and records. Rather than going through every invoice, sheet, and document by hand, automated freight auditing software makes it easy to manage.
Outsourcing this function to an all-mode audit and payment company is also a viable option gaining popularity among shippers today. Whatever method is used for auditing and record analysis, the shipping data gained can help capture relevant insights into excess spending and optimization areas for both the short-term and the long-term budget.
Understanding the Holistic View of the Supply Chain Through Freight Audit Data
The modern supply chain is governed by the need to view all carriers and network partners’ activities within one central data repository. Access to real-time data, KPIs, statistics, figures, and analytical data make it easier to avoid overspending and stay on target with predictive shipping budget planning. One of the most significant benefits gained through a transparent and end-to-end view of the supply chain is that it is easier to request, analyze, report, and transfer information. The ability to do this is invaluable for cost management, fee tracking, expense reduction, and budget adaptability.
For instance, when analyzing how a surcharge will impact the shipping budget, shippers can quickly use historical data, adjust projections for the new surcharge, and review spending projections.
Insightful Reports That Show Where to Focus Your Efforts of Shipping Optimization
Shippers today must have the ability to generate reports on demand and to share that data automatically with all involved parties and team members. Having this data to apply to shipping budget analysis makes it easier to maximize shipping and logistics optimization in the following ways:
- Flexibility to adjust services, modes, and carriers as deemed necessary.
- Savings opportunities from shipment consolidations, service downgrades, and approved carrier utilization.
- Insights into controllable issues that cause handling fees, late packages, and even fraudulent shipments.
- Better management of accessorial fees and expenses.
- Faster response to requests, concerns, and disruptions.
- Closer monitoring of transportation costs and spending.
Scorecards to Measure and Encourage Performance Improvements Among Your Network Partners
Scorecards can be pretty valuable for shippers when it comes time to measure network and carrier performance. Finding a reliable and affordable carrier for shipping partnerships is an ongoing process. Working with the right partner can help shippers manage their shipping budget while navigating changes in the economy by assisting with the following:
- Highlighting the problem areas that need to be addressed.
- Pointing out carriers and partners that are regularly falling short of goals.
- Understand how geographic locations and product placement create impacts for on-time delivery and additional surcharges.
- Providing management a clear picture of how vendors are impacting the budget.
Carrier Diversity Must Be Included in Your Shipping Budget Management Checklist
As noted by the Small Business Chronicle shipping experts, the best way to streamline the shipping budget process is to fully understand what’s shipped, its route, ETA, and its predicted expenses entail.
Heavy deliveries and loads requiring a quick turnaround need to be shipped FTL. Ultimately, working with a single-source partner, a single carrier, could increase risk of failure. Meanwhile, small deliveries that are more flexible with delivery timelines can be shipped LTL or parcel.
There are also options to include multi-modal and multi-lane shipping, as well including pool-point distribution. The goal is to utilize new strategies, such as hub injection, taking an omnichannel approach (ship from store), or working with regional carriers. That helps shippers operate more effectively and ensure all shipments move as expected, at the right cost and without delay. All this can help shippers stay within their budget and still get everything on the budget management checklist.
Gain Control Over Your Shipping Budget by Tapping the Value of Intelligent Audit
Without access to your transportation data and a lack of an accurate, predictive estimate of what shipping will cost, it is next to impossible to keep profit margins high. Access to real-time data and knowing how to make the best use of shipping budget analysis make smarter shippers and managers. Connect with Intelligent Audit today to learn more about how your organization can begin on a path toward a better, more proactive shipping budget.