These days, every company is cost-conscious. It’s a matter of survival: Companies that can deliver quality while protecting their margins will live to see another day.
Unfortunately, transportation spend can be a red flag in your company’s budget. Whether conveying materials or delivering finished goods, every executive is looking for practical and sustainable ways to reduce logistics costs and improve the business’s bottom line.
MCG Logistics has made it our business to reduce supply chain, shipping, and logistics costs by 15-35%. With that in mind, here are three topline methods for reducing transportation spend:
- Negotiating Prices with Carriers
Information is power. When it comes to negotiating prices with carriers, the more equipped you are with market intelligence, the better you can negotiate. One of the best repositories of market intelligence is the professionals who work the front lines. MCG’s negotiating team held senior level positions within the pricing departments for some of the world’s largest carriers, giving them an insider’s perspective on price points, preferred margins, and carrier pricing strategies.
That’s just one critical component MCG leverages to help you negotiate the lowest carrier prices. The other is our proprietary database that includes more than 500M (as in MILLIONS) shipment transactions. Utilizing our proprietary algorithms, we take your company’s profile and current agreements and compare them to the market. The resulting scorecard provides detailed analytics on areas for spend improvement. Armed with the facts, you’ll assume a stronger and more confident position to negotiate the best carrier terms for your company.
- Automating More of Your Processes
Once implemented, automation is one of the simplest ways to save time and money throughout your logistics processes. MCG’s automation tools can be applied to weighing, rating, shipment execution, tracking, post shipment audit, and reporting for parcel and freight carriers.
MCG’s state-of-the art cloud-based shipping application will help your company automatically select the best carrier based on least cost, best service, and other pre-defined business rules. By eliminating manual processes and automating shipment execution, you’ll reduce soft dollar costs (i.e. labor) and mitigate or eliminate overspend—resulting in maximized savings and profitability for your company.
- Improving Visibility and Transparency
Business intelligence is a true boon when it comes to identifying and resolving spend hotspots. MCG’s business intelligence (BI) reporting suite provides visibility into all aspects of your company’s transportation spend, which is absolutely crucial for making fact-based decisions, identifying opportunities, and eliminating waste.
Our process begins with specific, actionable KPIs that are uniquely tailored to your organization. Our BI tools provide valuable insights into your company and carriers’ tactical and strategic behaviors, including spend analysis, late deliveries, savings reports, on-time deliveries, market benchmarking, and much more. Having that kind of visibility into timely data will always give your company a leg up on adjusting your logistics and cutting overall costs, putting you miles ahead of the competition.
An honest, transparent conversation about the numbers is critical to driving your supply chain strategy, and the KPIs won’t be pats on the back, warm fuzzies, and fluff. We configure metrics tracking to correspond to your actual business goals, because cost reduction and ROI are mission critical.
MCG’s expertise in logistics and transportation spend allows your business to save money without sacrificing service. To learn more about how our best-in-class solutions can help your company, get in touch with us today.