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[BLOG] 3 Ways to Reduce Your LTL Freight Costs in 2017
3 Ways to Reduce Your LTL Freight Costs in 2017
by Ryan Heath, Insight Sourcing Group's transportation sourcing expert
If one of your goals for 2017 is reducing your LTL freight spend, and your plan for accomplishing it is issuing a RFP in hopes that applying competitive pressure to your incumbent carriers will result in them reducing rates, you may want to reassess your situation. "Pricing discipline" has been a rallying cry for LTL carriers for 5+ years now after 2010's price war left many carriers with an uphill climb back to acceptable profitability levels. So when your sales rep for your favorite carrier takes your request for lower rates back to his or her pricing group, the rep is more likely to come back with a price increase than a decrease.
So what are cost-conscious procurement and supply chain professionals to do?
Pursue carrier flexibility. Bidding out your LTL business every year is a good idea, aligning your freight with the carriers that find it most attractive at any point in time. However, this presumes some carrier flexibility. So start educating your team on carrier capabilities before your RFP. Start challenging carrier shibboleths in your organization – "That carrier is terrible; they are slow and they always damage freight! We can't afford to move away from our current carrier." – with data and facts about performance – "Actually, their transit times are the same or better in most of our shipping lanes, and their claims for damages look about the same." Because you may have to change carriers to save money.
Make sure you are utilizing regional carriers to the fullest extent possible. Regional carriers typically offer a lower price point with transit times often equal to or faster than national carriers. Using a national carrier on regional shipments typically leaves money on the table. At Insight Sourcing Group, we have seen cost gaps of 30% or more between competitive regional and national carriers. So make sure you are taking full advantage of regional carrier offerings.
Cost-optimize shipment routing. First of all, you should have more than one LTL carrier. If you don't, you are likely not taking advantage of the fact that carriers tend to have some geographical pockets that are more competitive than others. If you just have one carrier, you will never know.
But if you have multiple carriers, you must determine how to best use each. The easiest way to cost-optimize routing is to utilize a technology solution into which you can load all of your pricing agreements, and it shows you all pricing and transit time options on a shipment by shipment basis. All that remains is instilling the discipline of tendering shipments to the lowest cost approved carrier.
Many shippers, however, do not have technology like this, so a routing guide is developed that tells a shipper which carrier to use based on shipment origin and destination geography. However, in order to generate the routing guide, a comparison between carriers needs to be conducted that takes into account the varied LTL pricing factors: Tariff Discounts, Minimum Charges, FAKs, Fuel Surcharges, Accessorials, and Transit Times. A robust comparison, which requires a deep dive into historical data, is needed for a robust routing guide. Many shippers' routing guides only account for Tariff Discounts, not realizing how often the best priced carrier does not have the best discount. Judging the true low-cost option is only possible when you have a solid handle on your shipping patterns. A recent client discovered they could reduce costs 8% by making some simple routing adjustments.
The key takeaway here: spending the time to understand your shipping profile and modeling your carriers' pricing structures against that profile can lead to significant cost reduction.
For more information on how to reduce your freight costs, please contact us.
Insight Sourcing Group Founder Wins 2016 Character in Leadership Award
Tom Beaty Awarded the Turknett Leadership Group's 2016 Leadership Character Award
ATLANTA, GEORGIA – October 5, 2016 – Insight Sourcing Group is proud to announce that its founder and CEO, Tom Beaty, has been recognized by the Turknett Leadership Group for displaying outstanding character in leadership in the 2016 Leadership Character Awards. Tom was nominated by Karen Robinson, SVP of Business Development at Nanolumens, who noted his focus on self-improvement and his contagious humility. The Small to Medium category had 18 nominees total, all CEOs, Presidents, or Managing Partners of their organizations.
The Leadership Character Awards recognize Georgia leaders who display character in leadership based on alignment with the Turknett Leadership Character Model. The awards are presented by the Turknett Leadership Group and the Robert K. Greenleaf Center for Servant Leadership. Nominees must not only be leaders of character but also must pass Robert Greenleaf's "best test" — that is, they must help those they serve grow.
For more information on the 2016 Leadership Character Awards, click here.
About Insight Sourcing Group
Insight Sourcing Group is considered one of the premier management consulting firms focused exclusively on Strategic Sourcing and procurement-related services in North America.
Founded in 2002, the firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices. Insight Sourcing Group has worked with hundreds of corporate clients and over 50 private equity firms. The firm has developed a reputation for the collegiality and high caliber of its team, its tremendous focus on client-results, and for its ability to consistently deliver strong outcomes.
Typical client results include 20% average savings per indirect spend category, 5-15% for direct spend categories, 842% first-year return on investment, and project payback periods of less than 90 days. Insight Sourcing Group has also developed a market-leading Spend Visibility technology called SpendHQ®, which provides on-demand Spend Visibility to drive Strategic Sourcing results and ongoing analytics to measure performance and compliance.
About Turknett Leadership Group
Turknett Leadership Group's expertise is leadership. With nearly 30 years' experience, TLG is a premier resource for Executive Coaching, Talent Assessment and Development, Succession Planning, Business-focused Engagement Surveys and Cultural Assessment and Change. Through an approach grounded in science and guided by the Leadership Character Model, TLG helps organizations identify and develop hgh potentials, develop strong leadership teams, and create high-performing cultures. TLG has built a reputation for results and client satisfaction.
Consulting Magazine Names Firm a 2015 Top 10 Consulting Firm
2015 marks Insight Sourcing Group's third straight appearance on the Best Small Consulting Firms list.
ATLANTA, Georgia — September 14, 2015 — Insight Sourcing Group, the premier management consulting firm focused exclusively on strategic sourcing and procurement-related services, announced today that it has been recognized as a top ten consulting firm in Consulting Magazine's Best Firms to Work For list, an annual ranking of consulting firms based on employee satisfaction rates in the areas of client engagement, firm culture, firm leadership, career development, work-life balance, and compensation and benefits. Insight Sourcing Group ranked #9 on the 2015 Best Small Firms overall list, marking its third consecutive appearance.
"For our firm, this award continues to reflect the value of what we're doing for our clients," says Jake Wojcik, Senior Vice President at Insight Sourcing Group. "For our employees, it excites people more than they already are about what our firm is able to accomplish. And for our leadership, being a Best Small Firm to Work For reinforces the direction that we have taken as a business and enables us to position ourselves in a way that is more appealing to both customers and employees."
Each year, Consulting Magazine endeavors to identify "The Best" in a variety of areas important to the profession and its practitioners. Through extensive surveys and interviews with consultants, the publication's editors obtain a unique view of the latest and greatest trends shaping consulting. 2015 marks the eighth year that Consulting has ranked the Best Small Firms to Work For. Rankings were determined on the basis of an exclusive online survey. More than 12,000 consultants representing more than 400 firms participated in this year's survey.
To read Consulting magazine's article on Insight Sourcing Group, click here.
Insight Sourcing Group is considered one of the premier management consulting firms focused exclusively on Strategic Sourcing and procurement-related services in North America. Founded in 2002, the firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices.
Insight Sourcing Group has worked with hundreds of corporate clients and over 50 private equity firms. The firm has developed a reputation for the collegiality and high caliber of its team, its tremendous focus on client-results, and for its ability to consistently deliver strong outcomes. Typical client results include 20% average savings per indirect spend category, 5-15% for direct spend categories, 842% first-year return on investment, and project payback periods of less than 90 days.
Insight Sourcing Group has also developed a market-leading Spend Visibility technology called SpendHQ®, which provides on-demand Spend Visibility to drive Strategic Sourcing results and ongoing analytics to measure performance and compliance. Inc. Magazine has ranked Insight Sourcing Group among the fastest growing private companies in America every year since 2008, making Insight Sourcing Group one of the few firms to be listed seven years in a row.
Insight Sourcing Group was also recently named the #1 Boutique Consulting Firm To Work For in the US, and the #2 Most Innovative Consulting Firm in 2015 by Vault.
Insight Sourcing Group Named Atlanta's No. 3 Medium Employer
Consulting firm makes the Atlanta Business Chronicle's Best Places to Work List for the eighth straight year
ATLANTA, Georgia — September 11, 2015 — Atlanta's leading business publication, the Atlanta Business Chronicle, has named Insight Sourcing Group as one of the best companies to work for in Atlanta for the eighth consecutive year. The firm ranked #3 on this year's list of Atlanta's "Best Places to Work" in the medium companies division (companies with 50 to 99 employees). The rankings are driven entirely by employee surveys, where they are asked to provide information about their workplace, co-workers, managers, and work/life balance.
It is not hard to see why Insight Sourcing Group has made the list each year since 2008 (its first year on the list). The firm's management ensures that all employees have a voice within the company, and that each person is recognized frequently for his or her hard work. Fun team events are planned quarterly, and junior team members are constantly involved in important client meetings and decisions.
"We strive every single day to make Insight Sourcing Group a great place to work, and being ranked in the top three for companies our size makes me feel like we've succeeded in doing so," said Tom Beaty, Founder and CEO at Insight Sourcing Group. "We will continue to work at making our firm one of the Best Places to Work, not only in Atlanta, but also the country."
Atlanta Business Chronicle, in partnership with Quantum Market Research Inc. recently surveyed the metro area's businesses and organizations to find those that have discovered how to be among Atlanta's Best Places to Work. Over 500 companies participated. To find Atlanta's 2015 Best Places to Work, the Chronicle asked readers to nominate workplaces in metro Atlanta. Nominations were accepted through the Chronicle's Web site. Employees of the nominated organizations filled out online surveys containing a variety questions about their work environment, co-workers and managers. All answers were evenly weighted using a six-point scale (1=strongly disagree, 6=strongly agree).
The Atlanta Business Chronicle published an interview with Beaty in the September 11 – 17 issue which can be found online here.
Insight Sourcing Group is considered one of the premier management consulting firms focused exclusively on Strategic Sourcing and procurement-related services in North America. Founded in 2002, the firm works with senior executives and procurement leaders to accelerate Strategic Sourcing savings, increase Spend Visibility, provide category intelligence, and implement procurement best practices. Insight Sourcing Group has worked with hundreds of corporate clients and over 50 private equity firms.
The firm has developed a reputation for the collegiality and high caliber of its team, its tremendous focus on client-results, and for its ability to consistently deliver strong outcomes. Typical client results include 20% average savings per indirect spend category, 5-15% for direct spend categories, 842% first-year return on investment, and project payback periods of less than 90 days.
Insight Sourcing Group has also developed a market-leading Spend Visibility technology called SpendHQ®, which provides on-demand Spend Visibility to drive Strategic Sourcing results and ongoing analytics to measure performance and compliance. Inc. Magazine has ranked Insight Sourcing Group among the fastest growing private companies in America every year since 2008, making Insight Sourcing Group one of the few firms to be listed seven years in a row. Insight Sourcing Group was also recently named the #1 Boutique Consulting Firm To Work For in the US, and the #2 Most Innovative Consulting Firm in 2015 by Vault.
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info@insightsourcing.com
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