MISSISSAUGA — Logistics consultants Nulogx has just issued a white paper on freight rates. It states that rates are headed upward and transportation costs for shippers have risen by 4.5 percent over the past year.

Ergo, Nulogx — which also produces the Canadian General Freight Index (CFGI)– is warning its logistics customers to sharpen their pencils to avoid more increases. (Freight movement can represent up to 7 percent of their bottom line, Nulogx suggests.)

The company has published a free white paper advising shipper clients on how to cut costs. It’s called "Top 10 Best Practices." We at todaystrucking.com call it "things your customers are saying about you."

Consolidating your spend with a core carrier
program often results in better
service Nulogx tells shippers.

(You can download the white paper for free yourself, by clicking here).

Meanwhile, here’s a sneak peek at the playbook.

1. Pay attention or pay more.

"One of the biggest mistakes companies make is to assume that everything is in
order because their transportation costs are in line with past experience.

"Sales are up 10%, so transportation will be up 10%’ is a usual approach to managing this function. ‘Not necessarily so,’ say best-practice leaders.
"Form and then implement a comprehensive transportation plan."

2. Measure and monitor.

"The old and much-delayed data pulled from an accounts payable or ERP system does not typically provide the right numbers in time to make a significant difference.

"To capture meaningful data within an actionable time frame, some sort of business intelligence system is required. Transportation managers have to understand which factors, such as routing guide compliance, fuel surcharges, accessorial charges, weights and shipment counts are changing and why, do they can react accordingly."

3. Align transportation strategy with corporate goals.

If your company’s success depends on speed to market, re-jig your strategy. "For example, it may make sense to spend hundreds of dollars extra for a faster level of service if the result is a reduction in inventory worth thousands of dollars.

Alternatively, it probably does not make sense to use expedited road carriers for stock transfers when intermodal service would meet delivery requirements."

4. Avoid leakage.

Create a corporate routing guide — and stick to it. National, and regional, freight managers should use the guide to determine which carrier is used for a particular shipment.

"For some companies this takes a shift in operations at a minimum, and a change in culture more broadly. If freight managers stray from the guide leakage’ occurs; your company won’t ship the volume it has promised its carriers, so in turn it doesn’t qualify for the negotiated volume discounts. Large companies, in particular those with multiple shipping locations and a large number of freight users, will need to invest time educating and informing their internal stakeholders on optimal transportation practices.

"Consolidating your spend with a core carrier program often results in both better service and better prices."

5. Audit every carrier invoice because the devil is in the details.

"The simplest way to drive out 2-5% of your freight costs is to audit your
invoices. That’s because this fast and furious business is rife with billing
mistakes.

According to a recent benchmarking study, more than 14%
of shippers surveyed stated that more than 5% of their LTL and TL invoices
contained errors, while more than 50% of LTL shippers reported error rates
of greater than 1%.

Incorrect weights, inappropriate contract rates, duplicate
invoices, missed consolidations, and unapproved accessorial charges are a few
errors (unintentional or otherwise) that run up your bills."

6. Improve, continuously.

"Nothing is sacred. A few of the popular areas where leading companies are finding improvements are:

• Managed in-bound programs
• Network modeling/review
• Consolidation strategies
• Multi-shipper collaboration
• Cube and load maximization
• Customer cost-to-serve analysis
• Modal alternatives.