08/31/2022 by Christine Morris
Logistics Analytics: Top Reports You Need To Reduce Costs
Optimizing your logistics can make all the difference in your business’s bottom line. However, to fully understand your logistics processes you need to look at your logistics analytics.
To start, you’ll need access to the right technology. One such piece of technology is a transportation management system (TMS). A TMS is an excellent investment and according to Logistics Management Magazine, has been shown to reduce transportation costs by up to 30 percent.
Not interested in reading? Find out these priceless tips on improving your logistics processes.
To get the most out of a TMS and your logistics, you’ve got to know what you should be watching. All the data a TMS provides can be overwhelming and the possibilities of what you could analyze are endless. Ultimately, sifting through that data can be complex and time-consuming. So, to make things easier for you, our Team of TMS experts found the top 5 reports you should be running so you can see your best return on investment (ROI).
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Getting the data you need for a good overview of your logistics processes doesn’t need to be complicated. These reports should give you a broad view of logistics analytics to help you reach your KPIs.
Freight Accruals
Freight accruals is a report used to keep track of the costs associated with transporting your goods to a customer. These costs begin accruing from the moment the goods deliver, and they get discharged once a freight invoice is paid.
Tracking freight accruals allows your company to calculate your true net revenue at any given time. As a result, you’ll gain a better insight into any outstanding balances accumulated during a specific timeframe, whenever you may need it.
Cost Allocation
A cost allocation report breaks down your freight charges by a mile, pound, or SKU.
For any multi-stop loads, or loads made up of many POs, freight charges can be allocated to each order based on the percentage of distance, weight, or quantity the individual order contributed to the whole. Therefore, tracking your cost allocations will give your company a better look into the true cost of transporting your goods. You can then use this report to identify your most costly SKUs or lanes.
Carrier Scorecard
Carrier scorecard reporting helps you track a carrier’s performance. This will show data such as tender acceptance, on-time pickups, and on-time deliveries.
A carrier scorecard report can help you find which carriers are meeting your transportation needs and which are causing extra work. For example, carriers who bid low on a request-for-proposal (RFP), proceed to decline tenders, or provide poor service can cost your company. Without knowing how your selected motor carriers are doing, you could be facing thousands of dollars in extra expenses or, worse yet, lose customers.
By tracking your carriers’ performance, you can reevaluate your routing guide by selecting more reliable carriers on trouble lanes, improving both your costs and customer service. Additionally, this can help you set solid KPIs with your relationship carriers so you can better communicate your needs.
Least Cost Carriers
Least cost carrier reporting helps you identify loads where the carrier with the lowest cost didn’t haul the freight, the reason why, and the extra freight charges that occurred as a result.
This logistics report can help your company identify potential problem areas, resolve the underlying issues, and prevent unnecessary expenses from occurring in the future. If you’re looking to cut freight costs, this report clarifies where your missed opportunities are located.
Since cost isn’t the only factor when selecting a carrier, this report can also help you identify carriers that get repeatedly passed over despite offering lower rates. Therefore, these carriers provide you with the opportunity to work with them on a service-level agreement before you award business solely based on cost.
Power Lanes
Power lane reporting identifies new lanes and provides a benchmark for negotiating contracted rates with carriers.
You can identify a new lane as an origin-destination pairing that occurs a set number of times. Once a new lane is identified, the spot market rates paid to move that lane get broken down by load, mileage, pound, and more. This helps you have a point of reference when negotiating rates with carriers.
Identifying power lanes will help you secure fixed rates and better predict future freight costs.
Note: Most transportation management software products have the ability to run the five reports listed above. If you’re missing out on these exclusive reports, or you’re interested in a TMS for your supply chain, request a special demo with our logistics experts, who can help assess your needs!
MAKE LOGISTICS ANALYTICS MEANINGFUL
The logistics part of your business is complex and dynamic. There are lots of moving parts with many potential bottlenecks, so it’s important the metrics you report on are meaningful.
The right logistics analytics will help you measure performance, optimize routes, and streamline functions. Without the proper data, your business growth will be stagnant. There’s no way to know what needs to be changed if you don’t have visibility.
Additionally, unfound inefficiencies can impact your customer service and carrier relationships and can lead to lost sales and higher costs. Having the right logistics analytics can be one of your most powerful tools and make a big difference in your everyday business activities.
START LEVERAGING YOUR LOGISTICS ANALYTICS
According to research, 93 percent of shippers believe logistics analytics are critical to making intelligent decisions. And 71 percent believe that data improves quality and performance. Yet, too many businesses continue to use manual, time-consuming processes to analyze their logistics.
Take advantage of logistics technology and innovative logistics analytics so you can find actionable insights with the right reporting. And if you need help with your logistics analytics, we can help.
Start hitting that easy button because a TMS with Trinity can make tracking your logistics data a breeze. Not only do we understand everyone’s needs are different and offer customized solutions, but you also have the option of as much or little support from our superusers as you want.
And if you’re looking for expert advice based on your logistics analytics, Trinity offers Quarterly Business Reviews so we can help you find efficiencies.
So what are you waiting for? Let’s get connected and see how we can optimize your processes.
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