to pass the test. “Most costly mistakes in LTL that shippers make could be avoided with additional education,” says Thompson. The shippers who optimize their supply chain journeys from start to nish— including carrier processes, rules, and pricing methods—will conclude their journeys with optimized balance sheets. n
Smart shippers turn to knowledgeable sources to provide that nuanced analysis, guidance and advice. “You have to look at it not just customer by customer, but order by order,” Cole says. “Fees are so dynamic that you have to have someone who lives and breathes this every day.” The lesson is: Learn the answers
you run your balance sheet. If you don’t plan for that additional potential from the outset, then you risk having some big sways.” Those sways can devastate a balance sheet, a critical lesson for all companies. “It depends upon your company’s goals and directions and the pace you’re trying to move at,” Nakayama says. In this regard, he says, smaller companies may have an advantage. “For instance,” he explains, “if you are a large whale in the ocean, it will take a bit of time to maneuver and turn 45 degrees to continue where you want to go. But if you’re a smaller sh, even a minnow, you’ve got the ability to pivot quickly. “No one is to say that the minnow is not able to optimize better or worse than the larger sh,” Nakayama adds. NEGOTIATE AND VERIFY Also critical to optimizing cost ef ciency in the supply chain is setting the right prices before the journey begins. “Shippers of all sizes, but particularly small to mid-sized shippers, tend to feel like they can handle their freight negotiations on their own,” says Nightingale. “They are increasingly up against sophisticated pricing functions within the carriers.” As a result, he says, shippers may miss “subtle but no less impactful” charges that are embedded in the charges they accept. “Pricing functions within carriers have gotten so sophisticated now that they are able to effectively target those items that can make them the most money and, at the same time, be most likely overlooked by shippers,” Nightingale says. Once rates are negotiated, it is likewise important to audit your invoices—and, if indicated, to seek assistance in that process as well. “The typical accounting department may not be quali ed or doesn’t understand what a freight classi cation is in, say, an LTL shipment,” says Juliano, who emphasizes the need to “ensure that the rate that was negotiated was actually billed and subsequently paid.”
Small- and mid-sized companies sometimes fail to regularly analyze the expenses they incur during the supply chain journey. As a result, these smaller companies often overlook savings opportunities that could reduce their shipping costs by 10 to 20%. Experts suggest these six tips for ongoing review: 1. Examine cube utilization Is every container maximized? The more specific, the better. Analyze each trailer and every box to ensure they are filled to capacity. 2. Know your costs Again, the deeper the dive, the better: Analyze your spend by every customer, every trip, every location. 3 Collaborate Honesty and transparency in your business relationships are vital not only to maintain your customer base, but also to unlock cost cuts. Which party along your supply chain can leverage its own relationships to reduce expenses? 4. Harness technology As challenging as it is to keep pace with constantly evolving—and improving—software, artificial intelligence (AI) and robotic o¬erings in the supply chain, the potential savings are well worth your time and attention to keep up. If you lack the internal capacity to do so, hire a consultant. 5. Audit your bills Freight audit and payment data is a treasure trove of information. Invoices serve to track your supply chain journey, but they can be overwhelming. The money associated with those seemingly arcane details, however, is too significant to ignore. Are there unnecessary services there? Do the charges and the services match? Check it out. 6. Look ahead Change is a constant. Don’t just expect it; plan for it. Forecasting for supply chain disruptions should be built into your balance sheet. 6 TIPS To Strengthen Your Supply Chain And Boost Your Balance Sheet
June 2023 • Inbound Logistics 105
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