It goes without saying that the manufacturing and retail industries are slowing and this is a challenge to the status quo. A well designed freight program can add good value.
“Many companies are asking ‘What can we do well here in North America? Credit is tight and how can we make better use of the dollars we do have?’” said Dan Goodwill, a specialist in Logistics at an event with DTA and Jacoline Loewen, author of Money Magnet and a partner in raising capital. Don Goodwill advises, “A good place to start where there are opportunities for cost savings and logistics offers many hidden opportunities.”
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§ On time service
§ Billing accuracy
§ Refusal rates – is your order profitable to them?
§ Claims and exceptions
Goodwill suggests that the key is to actively look for paradigm shifts. In other words - change from one way of thinking to another.
Places to Start to Look for Change
- Examine your inland freight costs – it’s a missed opportunity. Look at alternative logistic venders and change your requirements. Could you live with longer lead time of five days instead of two and go for a lower price? Revisit your economies of serving your own market and see where you can be flexible.
- Check your assumptions about the cheapest and best ways. There was a time when if comparing box cars and trucks and you were doing a bid - the truck rates were better than the car load. This has shifted.
- How can you leverage your freight smarter? For example, are there ways you can make life easier for your carrier? Are you asking them to arrive at four in the afternoon and then sit there waiting, charging up your fee?
- Look to your customers’ needs. For example, Shoppers Drug Mart has inbound freight from many vendors and wants to leverage that freight cost as it is a good opportunity to save money. Instead of 3,000 incoming vendors, it wants to go down to 1,000. How can you help your customers simplify, streamline and save money?
- Understand your true costs. You can benchmark fuel surcharges and figure out the rate between Calgary and Montreal.
Dan Goodwill, President Dan Goodwill & Associates. Dan was the previous President of Yellow Canada, President of Clarke Logistics, General Manager of TNT Railfast and Vice President Sales & Marketing TNT Overland Express. His broad experience makes him a knowledgeable public speaker on cost savings programs and profit generation.