We live in a very dynamic world. Who would have thought we would see the cost of diesel fuel reach $100 a barrel, the Canadian dollar surpass the US dollar in value and the US housing market take a big hit, all within such a short time? The moral of the story is that you cannot create a freight program and then expect to be able to leave it in place for a couple of years. As you begin the New Year, it may be time to make some New Year’s resolutions.

1. Integrate Disparate Supply Chains into Supply Chains by Customer Group.
Take advantage of efficiencies that may be available by sharing trailer space with other divisions or even competitors that are shipping to the same customers. Look at all aspects of your logistics program, not just the freight component. It may be time to think about locating warehouses in certain key locations, shipping truckloads to these locations and then delivering LTL shipments direct to customers.

2. Integrate Inbound and Outbound Transportation under One Roof
The fact is that your inbound freight (your vendors’ outbound freight) may be a profit centre for them. Seizing control of your inbound freight may create opportunities to develop round trips,leverage larger volumes with your carrier base and save your company money.

3. Check on your Customers’ required Transit Times
Then compare them to what you are receiving from your current carriers. Look at all options to deliver your products under various scenarios (i.e. road, rail air, ship).

4. Audit your Freight Invoices
Carrier rate errors and overcharges often amount to one percent of your freight charges. Make sure you have in place strong ongoing monitoring tools (and not just spot checks) to ensure your company is not giving away some of its hard earned profits. A TMS system (see resolution 8 below) may be the answer.

5. Make sure your Rates and Service are in line with Customer Requirements.
Benchmark your rates against those paid by other companies carrying the same or similar commodities on the same type of equipment on the same lanes. A benchmarking study can be a wise and modest investment for many shippers.

6. It’s Not All About Price
Surround yourself with carriers that provide a quality service at competitive rates. Sooner rather than later you will get “burned” if you select your carriers based on rates only. Guaranteed.

7. If you have not conducted a Freight FRQ in the past two years, now is the time.
The freight market has changed considerably over the past couple of years. If you ship cross-border, you are likely in for a surprise. Southbound freight to the US is very desirable at this time and you are likely to receive some very attractive rates. Make sure your carriers can supply service, capacity and price. If they can only supply one or two of the three, you need more carriers. If you have conducted a freight bid within the past year, don’t be greedy. You may receive an RFP backfire as carriers increase their rates to more profitable levels.

8. Look at Transportation Management Systems
The technology has come a long way in recent years. Now small shippers can enjoy the benefits of a TMS system by paying per transaction with no up front cost and a very short “ramp up” time. Look at the trade-off of consolidating (and/or deconsolidating) shipments and the superior management you will receive as compared to the costs. You may be surprised at the value proposition of TMS.

9. Develop and Maintain a Carrier Scorecard or Transportation Dashboard
These tools come with most TMS systems. If you don’t go for a TMS system now, use your carriers’ reports to populate your monitoring tools. Don’t tolerate sub-par performance.

10. Manage your Freight Spend
This is one of my “pet peeves” with many shippers. Non-compliance (i.e. using carriers out of or towards the bottom of the routing guide) and poor or no management of accessorial charges can undermine the first nine New Year’s resolutions. Work on improving your company’s freight spend management in 2008, one segment at a time. You will soon see the fruits of your work.

Have a Happy New Year!