A transport analytics and carrier management solution

Client

An international automotive parts manufacturer

Business case

Insufficient resource capacity resulted in poor decision making and unnecessary high costs of expedited shipments

Scope

  • Manufacturing plants located in 5 countries
  • Outbound flows to 30+ car manufacturers worldwide
  • $730k freight spend
  • Just-in-time and ad-hoc transport requirements

Background

A lack of awareness around available carriers, shipping modes, types of service, and rates, along with limited resource capacity, caused the client to settle for the status quo rather than fully exploring alternatives.

Transport decisions were often rushed and left the client with no time to compare costs, often eliminating the competition between carriers and forwarders.

The costs of emergency shipments became progressively more expensive. It became clear that the lack of benchmark data was hindering the manufacturer’s ability to effectively compare, negotiate and ultimately select the best transport solution possible in a timely fashion.

Results

  • Balance between transit time and freight shipping cost
  • $110k annual cost reduction
  • saving of total freight spent in premium freight 15%
  • Healthy competition between carriers and freight forwarders beneficial for customer

Cost reduction with transport analytics and carrier management

Solution

It was essential for EXL to gather benchmark data in order to get to better informed decision making. Access to these benchmark data allowed the team to review the shipment profile and suggest alternative and more cost-efficient transport solutions.

EXL then developed an easy to use cost comparison tool for the client to refer to on a daily basis. EXL also negotiated new long-term, fixed rate agreements with carriers and forwarders for frequently used destinations, reducing the cost and resources associated with ad-hoc pricing.

The interactive tool also helped to ensure that a premium shipment was allocated to the best, most cost-efficient mode of transport, based on all known factors.

Results

The implementation of an easy to use freight cost comparison tool garnered numerous immediate benefits, including:

  • Reduced freight shipping costs by 15%
  • Identification of best shipping option and carrier for each shipment
  • Control on Premium freight movements and cost
  • Clear and known cost for pre-defined period with no surprises
  • Comparing Transit Time versus Door / Door cost -> best case alternative selected
  • Set up of premium rates for frequent destinations
  • Reduction of number of more expensive premium shipments

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