Cheap is not always best: How to get performance and value for your

Cheap is not always best:

How to get performance and value for your

presented by

Shannon Vaillancourt

 Less-than-truckload (LTL)

 Tender shipments that optimally

match your carriers’ network

 Full Truckload

 Take advantage of carriers with

backhaul opportunities

 Inbound Routing

 Empower suppliers to make the

optimal transportation decisions

 Mode Determination

 Utilize real-time rating to automate

Common Rate Base

50,000 lanes X %

Y %

Z %

Lane Awards & Final Pricing

 Carriers submit pricing off one common rate base with state to state or regional discounts  Carriers submit pricing based on highest cost in lane and city groupings

 Shippers compare discounts by hand to award a state or region to a carrier

50,000 (lanes) + 3 (carriers) = 50,000 total lanes

common rate base = less flexibility for carriers

 Carriers are provided with one year of historical data with exact lane and product details  Carriers submit pricing on their own rate base with zip-to-zip discounts & floor charges  Shippers utilize predictive analytics to model data and determine proposal outcomes

Carrier’s Rate Base

500,000 lanes

Carrier’s Rate Base

500,000 lanes

Carrier’s Rate Base

500,000 lanes ABC %

XYZ %

JKL %

500,000 (lanes) x 3 (carriers) = 1,500,000 total lanes

Lane Awards & Final Pricing

greater flexibility,

more lanes, less risk = more aggressive pricing for shippers

Predictive Analytics Engine

OUTCOME

1 OUTCOME 2

OUTCOME

 Carriers enjoy a uniform profit level, shipper enjoys sustainable rates  Provides carrier with tangible results, i.e. “Do X get Y”

 More of a collaborative approach

 Analysis “tells” carriers the exact discount level required to receive the

amount of freight they want

 Objective approach provides carrier with assurance that the amount of freight will be obtained

 New process puts you in lockstep with the carrier • Carrier’s rates are lowest in the lanes they operate efficiently • One carrier’s low cost lane may be another carrier’s high cost lane

 Shipment from Cranbury, NJ to anywhere in Indiana • Common rate base has

7

• Carrier X has

24

75

21

• Carrier X

• Aggressively prices based on $0 lanes—carrier loses • Conservatively prices based on $10 lanes—shipper loses • Carrier Y

• Aggressively prices based on $14 lanes—carrier loses • Conservatively prices based on $32 lanes—shipper loses • Carrier Z



Shipper & Carrier wins—Win-Win



Have carriers price based on their rate base



Tender freight to the carrier that is lowest in the given lane



Freight is inexpensive in the lanes that the carrier wants, i.e. operates well

in

Reverse Auction Platform

 Ensures lowest cost solution

 Ability to audit all ‘spot quotes’

 Minimizes work at Branch level

 One time input  No calling carriers

 Easy to find lowest bidder

 Auction Timed to maximize results  Results can be leveraged in the future  Initial bids level set on market

intelligence

 5-star rating system  Carrier Development

 Simple to expand carrier base  Access to additional Truckload

Capacity

 Attract high quality, high capacity

carriers

 Take advantage of dynamic backhaul opportunities

Benefits to Shipper & Supplier

 Optimize mode selection between parcel, LTL & Full Truckload shipments

 Optimize inbound and 3rd _{party shipment}

carrier selection

 Supplier prints parcel labels, Bills of Lading and custom packing slips

 Visibility to open and fulfilled purchase orders through dashboard KPI

 Integration with ERP or WMS

 Access key Purchase Order details such as parts, quantities, and reference numbers  Automated shipping feedback eliminates

manual communication processes

 View entire shipping history and re-print shipping labels & documents

» Provide automated tools for all suppliers to fulfill purchase orders and optimize

Mode Determination through Real-Time Rating

 Optimize mode selection between hundredweight and LTL shipments  Allow TMS to plan shipments based on given day or wave of orders

 Replace the inbound routing guide with an inbound portal that determines mode  Use deliver-by-date logic to enforce cost and service business requirements

» Utilize a real-time rating engine to determine mode rather than static elements

Weight Pieces Mode

> 150 lbs. > 15 pieces LTL

≤ 150 lbs. ≤ 15 pieces Parcel



Savings Key Performance Indicator (KPI)

•

Calculate “before” cost to measure savings

 Lost Savings Key Performance Indicator (KPI) • Calculate optimal carrier to measure lost

savings

• View your trend over time

• Identify what is preventing you from achieving

your goal

presented by

Shannon Vaillancourt

[email protected]

@RateLinx

Cheap is not always best: