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Routing Compliance and Optimization

While negotiating the most favorable rates possible from carriers is a critical component in any effective supply chain cost management effort, it cannot stop there. It is essential that companies implement processes that ensure that they are effectively utilizing the terms they have negotiated. To achieve this, businesses can adopt a range of tactics, including:

1. Implementing a transportation management system (TMS) to help select the optimal carrier and mode for each shipment.
 

2. Providing training to internal and external associates to ensure they understand how to choose the right carrier and complete associated paperwork accurately, avoiding costly overcharges.

3. Utilizing compliance management tools to ensure standards are being met both internally and externally, with appropriate follow-up actions taken when they are not.

// FREIGHT THINK IN ACTION

A large company on the West Coast was making multiple truckload shipments every week to the same retail chain. However, they were under the impression that it was a violation of the customer's routing guide to put multiple stores on the same pallet when building loads.

 

This resulted in pallets of varying heights, leading to poor cube utilization. The issue was only uncovered after a thorough analysis was conducted.

 

The vendor was subsequently instructed to build standard height pallets without regard to the number of stores on each pallet. This led to a significant drop in freight costs, by over 20%, as well as a reduction in the vendor's picking and pallet expenses."

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