Best Practices: Freight Logistics Management

For many companies today, freight is one of their biggest expenses, and it is only getting bigger as the world is becoming more integrated and eCommerce is becoming the norm.

“Freight can make or break a company”. These words came from a senior executive at a global company recently at a logistics seminar. He was talking of course, about the ability for Freight to be a differentiator in business today, and how logistics can set the best apart from the rest.

Freight has always been a focus for companies, given it is on average the second largest expense. However, what has been getting attention recently is Freight Logistics Management, and how managing companies freight effectively not only saves money, but more importantly, can be the factor as to whether a company is successful or not. Consumers more and more are expecting next day delivery – if not same delivery. If you can’t beat your competitors with getting your product to consumers, then you will be left behind, and that costs you business.

So what are the best practices for freight logistics management?

  • Work out what is important to your company with respect to freight. Is it service? Is it price? Is it performance? Do you promise your customers same day delivery? Once this is determined you can work with a trusted freight provider to get this right. Too often I hear companies say “the price is right but the service is bad”. It can be hard to get the mix right, and that is why you should engage and work with a freight provider as a trusted partner – but first things first, work out what focus you need.

  • Once you’ve worked out your focus, choose and work with a freight provider that can meet your needs. Freight providers often have an advantage your company – their core competency is freight. By engaging and working with a freight provider whom is working towards your goals with respect to freight (be that cost, service or performance) you can then spend your time and effort focused on what your company does best, and leave the freight to the experts.

  • Use cutting edge technology. There are some fantastic technology solutions out in the market place, such as RFID, and if you aren’t using them you can bet your competitors are. Technology now enables companies to see where their data is in real time, and proactively monitors whether products will be on time or delayed. Use this technology to offer new services to your consumers, such as the ability for your customers to view where their product is at any point in time. Consumers today are demanding these value added services.

  • Measure and monitor key performance indicators. Good freight providers will do this, as it is a critical component of managing logistics. Managing freight performance enables you to see the routes and times that are problematic, and you can then focus on driving continuous improvement in those routes.

  • Focus on fuel levies. Fuel levies are expensive and extremely confusing for many companies. Ensure you understand how they are calculated, so that you can negotiate the best rates for your business. If you don’t understand how they are calculated, then engage a freight provider who does, and who can negotiate these on your behalf. This will help you save costs.

  • Implement a “Lean” supply chain. By this, we mean ensure management has a focus on continuous improvement, and eliminating waste in the supply chain. Advantages of focusing on a lean supply chain will ensure supply is more tightly linked with demand, as well as helping to lower inventory risk – all important in the freight logistics management journey.

I hope these key points in Freight Management logistics help you realise your business goals, and put you on the path to excellence in the supply chain.