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Freight Spend Review

CHALLENGE

Our client, a private equity owned portfolio company, had been advised by a Transportation Management System (“TMS”) provider that the provider’s pricing software would have allowed the client to save over 20% of freight spend for the last twelve months had it been in use. The TMS provider was using the savings figure to justify a large upfront capital expense to purchase the system. Our client’s operations team (and freight department in particular) disagreed vehemently, and top management wanted to understand whether they had been overpaying for freight by 20% for the last twelve months.

ACTIONS AND RESULTS

Wynneford Advisors conducted a research project that lasted under one month. Wynneford obtained the data set used by the TMS provider and validated it against internal company records, historical company data and market data for top lanes. Through running statistical analysis and using business intelligence software, Wynneford determined that the TMS provider had errors in their calculations that led them to restate the savings number from 20% down to 5%. Additionally, Wynneford determined that the 5% savings figure relied on fundamental changes in how the client operated its freight department that were incompatible with the current staffing and technology. While Wynneford ultimately determined that savings were possible, those savings had nothing to do with the purchase of the pricing software offered by the TMS provider.

TAKEAWAY

TMS providers can promise large savings without having to take responsibility for execution. Most standalone technology providers do not provide adequate training and expertise necessary to take full advantage of their solution. Wynneford was able to show that a 20% savings number found in a TMS sales presentation was demonstrably incorrect, which prevented the client from budgeting a high savings number that would have been impossible to achieve. 

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.

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