This document discusses freight costs and outlines a freight savings program. It notes that freight costs make up 58% of transportation budgets on average. The document then discusses outdated pricing models, over 750 different freight charges, and lack of transparency in pricing. It introduces a gainshare model for freight procurement that provides cost transparency, partnership with shippers, and pays 3PLs based on performance and verified savings. Examples are given showing average client savings of 30% through this program, with specific customers reducing freight costs by 30-56% and improving other metrics like carrier compliance and damage claims.
5. What Impacts Freight Costs?
Fuel
l
essoria
Acc
harges
C
Internal
Operations
Rate Base
Handlin
g
Betwee
n
Destina
tions
Freight
ns
Classificatio
Over 750 Different Charges!
9. 2010 University of Tennessee Study
Many shippers are unaware of
additional accessorial charges stated
in the carrier’s rules tariff, which are
“incorporated by reference” on the bill
of lading and/or in the pricing
agreement you have with your carrier.
A typical rules tariff can run between
30 pages to over 200 pages per carrier
and are subject-to-change with no
notice to the shipper.
Alternatively, a shipper may require the carrier
to utilize a common rules tariff, such as the
SMC3 190 Rules Tariff, or write their
own rules tariff in conjunction with
the carrier.
10. 2010 University of Tennessee Study
1. Pricing models are outdated.
2. Too many constantly changing
pricing variables for any busy
freight manager to stay
informed.
3. Pricing variables change
without you knowing about it.
4. With the strategies and the
right tools, shippers can
minimize impact on profit.
17. Priority Gainshare
1
Proprietary
Rate Base
2
Wholesale
Buying Power
3
Contracts
& Legal
4
Technology
Platform
5
Consulting &
Operations
Proprietary rate base and buying power
Millions in freight managed annually
Our contract, not the carriers
Online TMS for easy scheduling/tracking
Weekly auditing, reporting & support
18. Priority Gainshare
Proac;ve
partner
En;re
supply
chain
Minimal
opera;onal
changes
Empower
shipping
department
Simplify
freight
process
Create
a
profit
center
19. How it Works
Analysis
(en;re
supply
chain)
Rate
nego;a;on
(our
contract)
Publish
tariff
(online
TMS)
Freight
department
one
page
guide
Weekly
audi;ng
and
reports
Bill
a
percent
of
savings
26. Lighting Manufacturer
Freight costs down 43%.
Carrier compliance: from 50% to 100%.
Damage claims: Over 2% to less than 1%.
Delivery lead times: 3-5 days to 1-3 days.
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27. Parts Distributor
Freight costs down 56%.
Total carriers from178 providers to 6
Damage claims down 400%
Freight is now a profit center
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28. Tape Manufacturer
Freight costs down by 30%
Total carriers from 30 to eight
Middlemen (profit margin) between Mexico and
United States shipments cut from 10 to only three.
Delivery time reduced by 50%.
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