CHALLENGE
Our client was a $1bn+ privately-held manufacturing company with operations in remote locations where sourcing transportation was costly and inconsistent. Prior to Wynneford’s involvement with one problem location, only 75% of orders arrived on time to customers and cost per pound was significantly above that of other client production facilities.
ACTIONS AND RESULTS
Wynneford implemented a freight managed services solution that produced 15% savings in the first year (worth over $600,000) and increased coverage to 99% even though plant output increased 25%. An additional benefit was a reduction in overtime for shipping / yard employees. Wynneford’s solution reestablished trust with the carrier base and allowed for analytics on carrier performance which were used to award freight to carriers based on performance.
TAKEAWAY
Due to the industry in which the client operated, margins were very thin and pressure was high on transportation to procure low rates. By pursuing low rates above all else and sending out mass emails to hundreds of carriers / brokers, the client was perceived as unreliable, “cheap freight” to higher quality carriers. The result was that the plant was in effect using brokers to pull in carriers from large metro areas over a hundred miles away. With many brokers posting the same freight, rates were bid up before the deadhead mileage and broker margins were added to the freight.
Wynneford Advisors helps you analyze your freight spend, create strategies to enhance performance and service, and then manage the implementation. We offer solutions for mergers and acquisitions, logistics streamlining, internal fleet optimization, and detailed freight analysis.
Work with a responsive and engaged transportation consultant team.
