Transportation Cost Reduction
"Cash covers a multitude of sins."
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Half of Your Costs
At 50% of total supply chain costs, companies must examine every opportunity to improve transportation expenses while sustaining proper customer services.
It is well worth the effort. Once identified, transportation reduction opportunities are quick to implement, provide fast payback, and generally require little capital investment. |
This may be particularly true in transportation. With nonstop top-line growth and focus on timely delivery, transportation managers have not sufficiently addressed, or had the methods, to stay on top of these costs.
Except for changes in fuel prices, tTransportation as a percentage of cost of goods sold has remained stable.
Transportation, one of the few functions integral to all daily operations -- domestic, international, or global -- almost always has the potential for expense reductions.
Finding savings in the complex transportation web of international and domestic supply chains requires experience and advanced methods.
Deficiencies That Drive Up Transportation Costs
- Incomplete / late shipment
- Incomplete / late documentation
- Excessive shipment size
- Carrier late for pickup
- Carrier late for delivery
- Miss airline / ocean vessel cut-off
- Incomplete / late documentation
- Capacity constraints due to unexpectedly large shipments
- Cargo off-loaded at trans-shipment point
- Long unloading times
- Backup at ports due to capacity constraints
- Incomplete / late documentation
- Order backup due to large volumes and capacity constraints
What We Can Do
With the knowledge of your freight needs, we:
Discover and disclose all transportation costs -- trucking, rail, intermodal, ocean, air, others.
Analyze transportation processes: plan, execution, and partner performance (carriers, logistics service providers).
Benchmark practices and costs against an extensive database of comparable companies.
Qualify and quantify each opportunity.
Implement opportunities that yield cost reductions.
Define new cost savings and performance metrics.
Train transportation managers and partners on the new operating procedures.
Our Transportation Cost Reduction (TCR) service yields quick and significant return-on-investment. We reduce costs without disrupting service. We find the hidden costs often buried in materials prices and unnecessary moves. We realize savings of 5-30%, which begin in as few as three months.
Business
Opportunities |
Solutions |
Typical Benefits |
Contain and/or
decrease transportation spend while maintaining or improving service |
- Audit and analyze current spend; quantify reduction opportunities; define actions to capture benefits
- Review selection, acquisition and implementation of transportation service providers and their associated processes and systems
- Analyze efficient use of transportation resources
- Measure results for on-going success
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5-20% |
Realize return on transportation
technology investments |
- Assess technology fit with client needs and identify more value-add system uses
- Review technologies available from existing service providers and quantify new benefits
- Integrate the use of new technology features into existing business practices
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5-20% |
Optimize effectiveness
of the transportation organization and people |
- Assess on-site skills and define knowledge gaps
- Analyze business processes and practices
- Identify quick wins and action plans
- Facilitate training and knowledge sharing and transfer
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5-10% |
Identify and size other opportunities to improve the transportation cost-service ratio |
- Analyze global transportation opportunities
- Create portfolio of quantified opportunities and implementation strategies
- Document cost/benefit analyses and decision support programs
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5-15% |
Our TCR service identifies and addresses your transportation cost drivers with the right initiatives. You gain lower costs and higher levels of service.
Learn More
To learn more, please complete our Information Request form.
Transportation Management and Reducing Costs in the Supply Chain
Visit the Transportation page for more resources.
Solving the Cost Reduction Riddle
For a complete discussion on aggressive, intelligent supply chain cost reduction on all elements of Buy-Make-Move-Store-Sell-Return of the supply chain, see this article by CEO James Tompkins.
Bottom Line Impact Now
Articles on ways to reduce costs in specific sectors.
Five Key Opportunities to Reduce Distribution Costs
Three Key Opportunities to Reduce Transportation Costs
Podcast
Listen to the podcast or read the text transcript: "Transportation: The 'Move' Component of the Global Supply Chain."
© Tompkins International,
Inc., All rights reserved.
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