How often are we seeing "Big Data" referenced in every day business? Constantly... right?
So how can you use Freight Data to make better Business decisions for your company?
Somewhere in your company, maybe Finance, Marketing, Logistics and Supply Chain, questions are being asked. Some related to freight, some indirectly tied to freight... Who in your company has the answers and how can they use data to back those answers up?
Finance and Sales
1. Why are freight cost rising?
This is the most common question raised. We look at quarterly numbers, maybe as a percent of sales and we see a rise. Typically a CFO will call the Logistics manager and ask, "why did our freight rates go up last quarter?" Not unusual for the Logistics manager to shrug and respond with something like, "well... our rates didn't go up!"
Was it the rates and the Logistics manager was unaware? Or did something else change? What other factors could cause an increase? Generally, the most accepted metric of freight cost is cost per pound. Aside from rates, three (3) factors can increase this number:
Longer Average Distance Traveled - Higher Average Class - Lower Average Weights
So why are freight costs rising? Was it actually rates? Or did your shipment profile change last quarter? DATA...
2. Customer suggesting a Freight Allowance? Are we better off with the Allowance or shipping Prepaid?
Try answering this without historical data. And there is more to this evaluation than simply looking at cost of freight. What about the fact that your team would no longer need to manage the freight and take on the risk of damages or sometimes worse, charge-backs for late deliveries, missed appointments, etc.
This is not an easy answer. While charge-backs and the risk associated with shipping are scary at times, it's more important to know what those potential risks are costing us.
How many claims have we had related to that customer?
How often has the carrier been late or missed appointments?
Don't be scared into accepting an overly aggressive Freight Allowance or Freight Terms without the data to review the real impact on your firm.
3. Can we get rid of Carrier X...? They keep damaging our shipments!
If I had $5 for every time I got that call! Or... "We had to pay 30% more and use this carrier because customer says our Low Cost Carrier is always late!" Are they really "always" late? Or did driver and receiver have a bad interaction and ...
Before we cost our company 30% more, shouldn't we be able to validate the extent of the damages or late deliveries?
We can use data to avoid a confrontation, and use facts to discuss meaningfully with the customer.
This week we started with a sampling of questions related to Finance and Sales. Next week, we'll turn our focus to the Logistics and Supply Chain departments and some common questions that can be more meaningfully answered using historical shipping data.
Do you have the tools to not only store, but also manipulate data to answer your burning questions? If not, it may be time for a conversation. Click on the link to the right and schedule some time to discuss.