Comprehensive Transportation Benchmarking Is Key to Freight Savings
November 17, 2022
Traditional transportation benchmarking practices are holding shippers back in a volatile economy where the market unpredictably seesaws and fuel prices constantly shift.
For years, standard operating procedure was to develop benchmarks using promised rates contracted during an annual RFP rather than actual transacted costs. The problem? Shippers that haven’t modernized their processes miss critical cost-saving opportunities.
But with the right partners and technology, you can access comprehensive transportation data that encompasses variable factors like diesel fuel prices, linehaul rates, and accessorial charges. This comprehensive data enables you to optimize your transportation network in response to real-time rate fluctuations and develop geographically specific strategies that generate cost savings and improved efficiencies.
To realize these savings and efficiencies, you need a deliberate strategy that begins with a thorough review of all the data you currently use for transportation benchmarking — as well as data you don’t.
How to Identify Relevant Transportation Benchmarking Data
The first step toward customizing your transportation benchmarking strategy is to evaluate the quality of your data. Not all data is actionable.
For example, some data points provide context about shipments without leading to new opportunities. Others may be important factors to consider but aren’t credible or relevant to your industry.
The bottom line is that it’s imperative to understand where your transportation data points come from and how they’re collected so you can determine whether they’re relevant to your network. You should ask yourself if your data is:
Dynamic. In today’s market, yesterday’s pricing is already outdated. For accurate benchmarking, you need real-time linehaul rate changes and fuel price fluctuations that enable you to remain agile and pivot strategies quickly.
Transparent. Data provided by peer and industry groups that don’t reveal their sources and collection methods is unreliable because these providers often aggregate information from a range of industries. You need clear visibility into the actual rates shippers on the same or similar lanes are paying to establish fair relationships.
Specific. Details matter. Movement type, equipment type, and fleet type all impact pricing. If the data you’re benchmarking against doesn’t align with your network’s size or scope, it’s impossible to optimize your transportation network strategy and identify opportunities.
Comprehensive. Do you have access to all the data you need, or are there pieces missing from the puzzle? External partners can help identify specific data needs and provide access to clean, unbiased data to supplement your existing data sources, delivering a complete view of your entire network.
Actionable. Does your data clearly present areas for growth, or are you in the dark about network improvement opportunities? Data from external partners can provide service, performance, and volume information that enables you to monitor carriers in real time and successfully negotiate or re-contract when necessary.
To determine whether your benchmarking data is dynamic, transparent, specific, comprehensive, and actionable, contact your IT and transportation management system (TMS) teams to conduct a data analysis. And it pays to be thorough. Companies frequently overlook siloed data that can yield valuable insights simply because it’s not typically accessible to end-users. Assess all available data points and then work with a transportation management technology solutions provider to transform siloed information into an accurate and actionable data set.
Go a Step Further
In an unpredictable economy, you can’t afford unreliable transportation benchmarking data. A strategic benchmarking solution guarantees access to extensive real-time insights that enable you to make accurate, data-informed decisions.
But analyzing your data is only the first step in a holistic transportation benchmarking strategy overhaul. Download our Taking a Comprehensive Approach to Transportation Benchmarking tip sheet to learn more about the four-step process.