Transportation Cost Control a Top Problem

Fortune 500 companies are overspending billions of dollars on shipping services according to industry analysis from Insource Spend Management Group, providers of spend management tools. This research echoes findings from a recent report, “Integrated Transportation Management in a Capacity Constrained Global Market,” from Aberdeen Group which noted that transportation cost relative to overall supply chain performance is the top pressure cited by 57% of transportation executives. In response, over 53% of survey respondents are seeking to gain better visibility to costs.

The Aberdeen whitepaper notes that the number one strategy for “best in class” companies to control overall transportation costs is renegotiating cost and service contracts with trading partners. As a result of proactive efforts, 91% of the “best in class” companies reduced transportation spend year over year, compared with 49% of other companies.

“The problem with gaining visibility into cost for shipping is the lack of transparency in carrier contracts,” said Brett Febus, Insource Spend Management President. “For shippers, it’s nearly impossible to know whether you are getting the best pricing and agreement terms from the parcel carriers.”

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