Using Data Analysis to Minimize Transportation Costs

In today’s data-rich world, the logistics industry as a whole is surprisingly behind the times. It’s been said that there are two ways to increase profits: raise prices or reduce expenses. Moving product around spends money. Whether a shipper is taking inbound deliveries of raw materials or sending a finished product to an end user, those shipments cost money, and a lot of it.

Business logistics is a massive industry: $1.45 trillion in 2014, totaling 8.3% of gross domestic product (GDP). Minimizing those transportation costs through data analysis can have a huge impact on a company’s bottom line.

Using the powerful reporting tools within CarrierRate 2.0, a shipper can see exactly what they are paying per pound for their freight shipments.

Have a supplier that costs your company as much as double per pound for the same product? It may be time to look for a new source. Even if a supplier appears to have a lower price than others on what you need, it probably isn’t worth it to ship across the country. You may consider opting for a more expensive, but local, supplier, and save on total cost by paying much less for shipping.


Even if a supplier usually routes a shipment, and claims shipping is free, they may have built that cost into their price. Inform your supplier that you can route your own freight and inquire as to what the price would be that doesn’t include shipping. The result may surprise you: a lot of companies build extra profit for themselves by marking up shipping.

Another factor to consider when it comes to inbound shipping is placing volume orders. Generally, the cost per pound of a full or partial truckload is a fraction of doing the same shipment in multiple LTL orders. Taking advantage of even lower intermodal rates can see greater savings, if you can afford the longer transit times. Shipping via full truckload or intermodal is definitely worth consideration if your company has the space to store an entire bulk order.

Consider the actual cost of freight to your company.

Do you usually include freight charges in your own pricing to your customers? Another stat to consider is your outbound cost per pound. If freight charges are going to result in little to no profit (or even a loss), then it would be prudent to put some of that financial burden on your customer. Using analytics, you can know ahead of time which states or cities are going to cost you the most, and mark up your freight charges accordingly.

Track your freight spend month over month to discover trends in the way your company spends on logistics.

If a company is growing, they generally will have an increase in both inbound and outbound shipments. Tracking your monthly spend is essential to keep a finger on the pulse of your business. There’s been a recent increase in firms that will analyze a company’s supply chain and logistics spend for a fee. If working with a broker or 3PL, demand that the TMS you use has built-in analytics and reporting features. This way, you can keep track of your transportation costs without incurring additional fees for paying someone else to track those costs for you.

GlobalTranz has developed a suite of tools within CarrierRate 2.0 to help shippers leverage their own data to their advantage. Cost savings, therefore higher profits, are within reach!

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