WATCH OUT- Low-Hanging Freight Ahead

What if I told you that 2% of your yearly freight volume makes up for 10% of your total freight spend?
That’s right. 2% volume = 10% spend.
If you’re shaking your head in disbelief, I can explain.

Mind Your Head
It’s a supply chain paradox really. You see, most supply chain professionals do not have an insight into that seemingly insignificant 2% part of their supply chain. It is loosely classified as “spot-buy shipments” or “ad hoc freight”, i.e. shipments that fall outside of the regular supply chain; that companies organize outside of their fixed and pre-negotiated rates.

Like a Loch Ness Monster…
Every supply chain professional working for an enterprise shipper knows of its awareness, but only a handful – that I’ve come across in my career – have seen it in action, i.e. been able to quantify an indicative dollar amount on what spot-buy freight is costing them on a yearly basis, and if its volume is proportionate to cost. But from the past years’ interactions with the said handful, I dare conclude, that a fraction of spot-buy freight volume is making up a grossly disproportionate level of cost.

Why? Because Margins
Although few and far between, spot-buy and ad hoc freight has taken a more serious role in the supply chain for many enterprise shippers, due to the fast-paced and changing nature of the business and its operations. We are seeing more demand-driven manufacturing, more nodes in the supply chain, more complex products, and shorter product-life cycles, all of which lead to an increase in the usage of freight that wasn’t planned ahead.

There’s More
Did you also know that most spot-buy shipments are awarded to providers of choice out of convenience? Not service level, nor price… but convenience. Yes, convenience. (are you feeling it too or is it just hot under my collar?) Here’s another nugget. More often than not, spot-buy shipments are sub-par on meeting delivery terms. Partially as there is limited room for managing visibility, navigating communications, and negotiating cost.

Start Enjoying Cost Avoidance
What if I tell you that you that with minimum effort and investment you can easily reduce your direct spot-buy freight cost by up to 30%? Cargobase is the first independent company that helps enterprise shippers to overcome all these challenges by using a single platform that can be setup in a matter of days across your entire organization. Our platform and expertise allows you to optimize your pool of providers, ensure your staff works with automated processes and makes decisions based on what is best for your business, not what is convenient.

We like to call it the low-hanging freight of the industry, minimum effort, maximum results.

What if I told you that 2% of your yearly freight volume makes up for 10% of your total freight spend?