June 2 2023 | 6 Min Read

Situation Files #2: Balancing cost-efficiency, speed and reliability

Posted By
Wendy Mackenzie
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Situation Files #2: Balancing cost-efficiency, speed and reliability
How $2000 saved on freight led to a bunch of other great outcomes

Welcome to SF2, which is kind of about negotiated carrier rates and also kind of about a whole lot more. But let’s start at the beginning. As you may already know, IL2000 will negotiate better carrier rates for you. We do that in a few ways:

  1. We collectively ship a higher volume of freight. Greater volume = better rates.
  2. We rate negotiate. Supply chain expert advocacy = stronger buying power.
  3. We rate shop. Shopping around = the best rate at that time for that shipment.

These three processes blend together and mesh seamlessly with our client’s standard shipping process to become fast, efficient, and capable of carving a big chunk out of freight costs. You can read more about our managed transportation services here.

But let’s step away from the bullet points. In SF2, we want to show you how rate negotiation works in a nitty-gritty practical kind of way. To do that, we’re going to give you a little window into a typical week working with one of our fastest moving clients — a food packaging manufacturer with a devilishly tricky supply chain.

You’ll see how in this particular week a chunk of saved money on freight spilled over into some powerful enhancements to the client’s shipping speed and reliability.

The upshot

  • Company saved $2,000 on carrier shipment rates in a week
  • Time-critical shipments got where they needed to go in under 24 hours
  • IL2000 rapid response team rescued a shipment when bad weather struck

The sitch

The client we’re looking at today is a food packaging company but with a twist.

Food packaging manufacturers face hefty food and safety regulations, and of course, this includes how they’re shipped to food processing sites. This company was dealing with an added layer of complexity, however. They manufactured packaging for highly fragile and perishable foods which must be shipped to extremely tight and inflexible delivery timeframes.

Until these guys met IL2000, they were in a bit of a tight supply chain corner. They couldn’t afford not to spend exorbitant amounts of money on carriers who could tick all four boxes of full regulations compliance, damages avoidance, fast delivery turnaround, and infallible reliability.

What was going wrong?

  • Slim profit margins: The company felt they had no wriggle room on quality and speed, and that meant the third pillar that had to give was cost efficiency.
  • No gas in the tank when they needed it: Everything about this supply chain was on overdrive. Paradoxically, that meant the freight team lacked resources to expedite extremely time-critical shipments.
  • Lack of control within the transport chain: Packaging was getting damaged on some LTL shipping lanes, invalidating the shipment's food-grade classification. Goods had to be returned, repackaged and resent, causing delays.
  • Maximum effort, all the time: The company was in a pressure cooker situation. No leeway existed for unpredictability in this company’s supply chain. Meanwhile, the global supply chain was full of unavoidable volatility. Rock, meet hard place.

The solve

Here we’ll look at a typical week just a few months after this client came on board with IL2000.

By Monday mid-morning, orders were already coming through at a brisk pace. A new business-as-usual was now in place where we’d blend volume rates, negotiated fees and rate shopping to identify the most cost-effective shipping option. By mid-week, the company had saved at least a couple of thousand on standard shipments. Stress levels were lower too, thanks to timely shipment updates and real-time tracking.

On Wednesday afternoon, an important customer contacted our client with an unscheduled order with a requested arrival of Friday morning. Could it be done? We mobilized a sprinter van and reached out to shipping terminals to be sure this item of freight received priority treatment. Shipment arrival: Thursday 4 pm. Phew.

On Friday morning, our freight team saw that bad weather delays meant one LTL shipment mightn’t arrive on time. We asked the client and they confirmed they’d like this shipment rescued. We reached out to our TL team, who used their clout to find a viable plan B. Everything went off without a hitch and one shipment timeframe (not to mention one stress-free weekend) was now restored.

What went right?

  • Shipping cost efficiency on tap: IL2000 equipped the company with a smooth and reliable way to consistently save meaningful money on shipping fees.
  • Speed when they needed it: We pulled a ton of pressure away from our client by reintroducing more gears back into their freight operation. When they needed to blaze a shipment in record time, IL2000 could pull out all stops to move the shipment as fast as logistically possible.
  • Improved shipping reliability: We leveraged a TL solution on challenging shipping lanes to improve handling and overall shipping reliability.
  • Troubleshooting bandwidth when it mattered: Most importantly, they now had brains on deck to actively think through how to make this precarious balance of speed and cost-efficiency happen. The company had been running on fumes for a long time, and now they had experts at their table to help with their toughest supply chain decisions.

The take-home

What does this situation file reveal about how to balance cost, time, and supply chain reliability? It shows that negotiated carrier rates are the first step in a much bigger process of optimization — one that can boost on-time performance, give you more “gears” to play with, and set your freight team up with greater overall resilience to adapt to the unknown.

Intrigued by the possibilities? … Let’s chat!

Topics: Case Studies, Supply Chain Management, Freight Costs

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