Every supply chain contains both hidden costs and potential savings. Smart shippers and their logistics partners utilize their data to discover cost-saving opportunities that improve profitability. By Richard Osborne
I n logistics, as in every business, the formula for success can be simply stated: Minimize your costs and maximize the bene ts you achieve from the expenses you incur along the way. But with the frequent twists and turns—some anticipated, some not— encountered in the supply chain journey, that simple formula is far easier stated than accomplished. In many accounting departments, too much happens on the path of products moving from here to there that is out of sight, out of mind and, as a result, out of control. But signi cant cost ef ciencies are there for the taking if companies examine their own data to unearth the potential savings buried there. “Intelligence is the holy grail,” notes Joe Juliano, president and CEO of MercuryGate, a transportation management system provider. Put another way: Knowledge is power. “Using data and information in a way that organizations can make decisions— that’s the key,” says Reid Klosowsky, of Freight Think, a transportation advisory group that he and fellow supply chain veteran Bill Maroney formed in partnership with NT Logistics. “You need to know your cost, by customer and by location, to be able to do a deep dashboard dive into understanding your total costs,” adds Lynn Gravley, president and CEO of NT Logistics. Dave Cole, COO of Willy’s Fresh Salsa, based in northwest Ohio, illustrates the point with an issue resulting from the pandemic. “A lot of distribution centers were short on personnel, so we ran into detention fees,” he recalls. Those fees are charged if trucks arrive beyond a 60- to 90-minute grace period of the scheduled time for pickup. These added costs surfaced in a review of the data.
solutions and viable freight audit and payment platforms that enable a small and mid-sized company to have the level of sophistication, at a reasonable price, that was reserved for the biggest companies a few years ago,” Nightingale says. “And they can compete very effectively.” “There is more ability now than there was 30-plus years ago for smaller and mid-sized companies to have the availability of information,” concurs Stuart Nakayama, president of Lynden Logistics, a full-service transportation and logistics provider that is part of the family of Lynden companies. Companies of all sizes would be well advised to seek out data-mining solutions that will help guide their shipping and audit operations. “There are resources available that they can access to be able to make some of those decisions,” Nakayama says. The power of the knowledge waiting to be uncovered in the data cannot be overestimated. “Shippers can look for anomalies and behavior, and they can look for existing patterns,” says Maroney.
“We’re always looking at detention fees to see if we can control them,” Cole says. “It has an impact on our ability to reduce our prices to our customers.” By utilizing the tools needed to stay on top of the costs associated with supply chain fees, as well as freight payment/audit, visibility and just-in-time shipping, shippers and the logistics providers who serve them can manage expenses that have a material effect on their supply chain balance sheets. POWER AT EVERY LEVEL In the real world of limited resources, are such powerful data-tracking tools the sole province of industry giants who also possess the human resources—in accounting and other departments— to translate the information into more cost-effective methods of operation? “If you asked me that question a few years ago, my answer would have been yes, but now the game has changed,” says Tom Nightingale, CEO of AFS Logistics, which provides global logistics management services and information technology solutions. “There are so many robust transportation management software
Optimizing the loading and unloading process can dramatically reduce costs.
June 2023 • Inbound Logistics 103
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