When summer temperatures begin to rise, planning for the upcoming fiscal year really starts to heat up, as well.
Around this time every year, most retailers are spending time preparing stock for the upcoming holiday season. Meanwhile, manufacturers are typically ramping up production rates. And the distributors that allocate all that seasonal merchandise are lining up shipments and drafting contracts.
Within all of that busyness, one critical role demands attention from each of them... the carrier.
The efficiency of the carrier who transports all of this freight between locations is absolutely critical to pulling it off in time. This is why many large companies trust an experienced logistics partner—like Redwood's Modern 4PL approach—to complete a routine transportation management audit.
A transportation audit is performed for reviewing carriers, shipping needs, and transportation procedures currently employed within a company's supply chain. With this data in hand, shippers can better plan and make decisions regarding their current needs.
In this blog post, we are going to look at why most large-scale companies trust a Modern 4PL to perform this essential service for them. Additionally, we will talk about how they actually go about helping shippers uncover areas of waste and turn it all around before winter!
How a Modern 4PL Helps Shippers Achieve Optimal Logistics With a Routine Transportation Audit
A logistics partner like Redwood should have one primary objective: improve the efficiency of their client's supply chain.
And while there are a number of methods, procedures, and areas that a Modern 4PL will target to achieve it, audits are a key tool. When you work with a logistics orchestrator like Redwood, they are looking at various areas in your supply chain. More specifically, they are focusing in on any area first that shows signs of weak points. They suss out these weak points, analyze them, discuss them with you and then go about applying appropriate fixes.
Let's take a look at a few of the benefits you will get from a comprehensive transportation audit:
Negotiations with carriers
Frequent shippers trust their logistics partner to negotiate shipping contracts for shipping rates and surcharges that are usually reduced based on volume.
However, Redwood's Modern 4PL approach goes much further than the simple volume-based shipping discount. We work with carriers in several modes from parcel to multimodal to find the best deals within your budget. We are able to do this a whole lot simpler than you may be able to in the given time-frame. That's the raw power of a strong network and open ecosystem model.
Once a carrier has been selected, your logistics partner handles all the negotiations, paperwork, and permits on your behalf.
Managing accessorial charges
One of the leading cost inhibitors to achieving supply chain optimization are unexpected accessorial charges. Modern 4PL providers have strong relationships with carriers, which permits them to further negotiate or eliminate several common extra fees.
When shippers go about this themselves, the results are lackluster in comparison. Most of the time, carriers will cut or significantly reduce fees for partners they work with regularly. This type of relationship and access to budget-friendly prices just takes time.
Time that your logistics partner has spent working with them already!
Improving warehousing
Some shippers find it cost-prohibitive to internalize their shipping and receiving operations. They trust a logistics partner to manage their warehousing and off-site hosting of freight – which not only saves them a lot of money, but tends to produce more accurate inventory control, and expedites the process of moving freight.
You can relax while your logistics partner researches, compares, locates, and acquires storage on your behalf.
Yet another process that takes a fair amount of time and money to make happen with any level of viability. Storage and warehousing, in general, is not cheap. Again, herein lies the power of an open ecosystem network like Redwood's.
What is the Goal of a Transportation Audit?
The benefits we went over above can significantly help any sized shipper improve their supply chain operations. However, these benefits are different for every company. Depending on the industry, demographics, and sales numbers these needs will vary just a bit.
But, that's the entire purpose of a transportation audit. To find issues and areas that can be improved upon to optimize the efficiency of your freight shipments.
The typical transportation management audit consists of three independent areas of review:
- Reviewing current shipping needs – The first item that creates a baseline of discovery for any audit is reviewing the needs of any service. This important first step permits your logistics partner to customize the audit for each client – so they can accurately determine whether your operations are operating on the up-and-up or can use some improvement.
- Analyze your needs for the future – It's always suggested to plan for future growth in any industry. But this is exceptionally critical for supply chain operations. If a business experiences growth in sales, but does not have the bandwidth to fulfill, the company will not satisfy new customers. The transportation management audit will consider this important attribute in any audit.
- Inspect all current agreements and procedures – Finally, once they have a baseline of understanding of your shipping and receiving needs, they will 'take a look under the hood' of your supply chain network. This includes reviewing all current contracts, shipping rates, surcharges, and the carrier's performance.
Final Thoughts
It's important to state that these three items are just the tip of the iceberg.
A professional logistics partner will always customize the audit to meet your needs – based on your specific logistics requirements. They will work with you to discover opportunities for improvements, ways to eliminate waste and show you how you can better serve your customers.