Solutions for Managing Transportation Spend

Successfully managing their transportation spend is a key challenge for transportation executives across all industries today. It’s easy to get bogged down in day-to-day operations, like making sure you get the capacity you need, at the right cost, to meet your immediate delivery commitments. Leading companies, however, take a broader perspective to set themselves up for success over the long term. What types of questions are they exploring and what actions are they taking? That’s the focus of a conversation I had with Dale McClung, Director of Design Solutions at CLX Logistics, in a recent episode of Talking Logistics.

Going Beyond Day-to-Day Operations

Transportation professionals are so consumed with managing immediate needs that it’s often difficult for them to step back and consider longer term strategic objectives. But Dale says that is what executives have to do if they want to ensure success over the long haul. “Being aware of performance against budget and strategic objectives, and understanding the levers to impact those, is critical for success today,” he says.

“Having visibility into their processes and data is something many companies struggle with, however,” notes Dale. “This takes away from their ability to analyze their operations and make effective changes. That’s where a logistics partner can help.”

Finding Value

I asked Dale for some examples of how they have been able to help clients in this area. Dale cited a chemical company that was moving large amounts of oil by tanker from the gulf coast to the northeast. By analyzing their needs and shifting some of their shipments to barges, this client saved 3-4 percent on their spend.

Dales cited another example of a company doing a great deal of LTL shipments with multiple carriers over multiple lanes. Again, by analyzing their data and and streamlining their LTL processes, the company saved 3 percent on their LTL spend.

Dale also talked about helping clients analyze potential moves to private or captured fleets, changes to improve customer experience, and aligning transportation strategy with corporate strategy.

Start at the Top

When I asked Dale how companies should approach an engagement with a logistics partner, he noted that many companies initially come at it from the wrong angle. “They start by wanting to reduce costs,” says Dale. “We try to shift their focus to start at the top considering corporate objectives and using that to design their transportation network. For example, if they are in a commodity market where price is the differentiator, we help them design a lowest-cost network. But if their objective is to use customer service as a competitive differentiator, the network design may be totally different.”

Dale points out that most companies have the data they need to analyze their networks within their TMS. CLX uses that data to work with clients to develop potential transportation scenarios to evaluate the best options to meet their objectives and create sustainable solutions.

The Analysis

Dale gave a number of other great suggestions of how companies can reduce transportation spend and improve service, such as taking a holistic approach to transportation planning and collaboration. So, I asked him what process companies should go through to analyze their networks and objectives. Dale says to start with a vision to the data, and then gave a step-by-step approach for aligning operations with corporate objectives, which you can learn more about — along with other insights — by watching the full interview.