Why Your Business Needs to Prioritize Inbound Freight Management

Charles Miller

16 January 2019

Could better inbound freight management boost your business?

Inbound freight management often does not receive the attention it deserves. Short supply chain budgets, increased visibility needs, and a competitive market for customer satisfaction are putting pressure on many shippers.

As transportation costs continue to rise — and eat more and more of shippers’ supply chain budgets — it’s time shippers take an in-depth look at their inbound freight and how they might better manage it to save money and gain efficiencies.

Inbound freight management offers a simple solution for savings

First up: relevance. You have your suppliers rolling in just fine. You’ve got established relationships. Sure, you see delays and claims and occasionally think that maybe there’s a better carrier out there.

Why is taking a closer look at inbound freight worth the time and risk of possibly ruffling all your business’ established practices?

Because the fastest way to save money on your transportation costs is to take control over your inbound freight. Too many suppliers and too little time? Consider partnering with a strategic 3PL to access their logistics technology, data analysis, carrier network, and management experience to speed up your ROI.

The hidden disadvantages of prepaid shipping

Traditionally, a business’ inbound freight is prepaid by their suppliers. This gives suppliers the advantage. When the suppliers prepay for their shipments, they add a little markup — anywhere from 10%-60%. This serves to recover some of their costs, but it can also create a profit center for the suppliers.

Some suppliers may negotiate markups; others are added into the product cost and essentially hidden. The best way to spot markups? Look for costs from your suppliers that aren’t line-itemized.

Suppliers may use their control of shipping as a catchall to gain other advantages that don’t serve you. These could include selecting their preferred carriers, which might unnecessarily inflate your bottom line, and shipping at times that keep their dock moving smoothly but yours congested.

Finding the savings

When you are buying products and get an invoice that includes freight cost — but those aren’t broken out as line item — start there. With numerous vendors marking up prepaid freight costs 10%-60%, you are looking at a big opportunity to save. But you’re also looking at piles of invoices from multiple carriers. Maximize your savings and access them quickly by outsourcing your inbound freight management to a strategic 3PL.

The right 3PL will manage your supplier relationships to ensure they are shipping according to your requirements. This means no more unjustified markups padding your freight costs, plus more resources focused on streamlining freight shipping for all parties.

We invest a lot of time into one-on-one, live training as we implement new tech with your suppliers.

Inbound focus: Training vendors

A 3PL takes the pressure off finding inbound savings by handling supplier relationships around shipping. More and more suppliers are comfortable with using technology to facilitate shipping. And we make the experience as easy as possible for you and your suppliers.

We invest a lot of time into one-on-one, live training as we implement new tech with your suppliers. When they enter a shipment via our website rather than emailing or calling, their repetitive information is pre-loaded, reducing delay and user-entry errors. That means that your freight is off their dock and on your line faster — a win-win.

Inbound focus: Tracking shipments

With prepaid inbound shipping, you are waiting in the dark. You have little to no visibility until a shipment shows up – or worse, doesn’t show up – or a supplier sends you an update. And the amount or frequency with which your suppliers provide you said updates varies widely.

In contrast, with 3PL management, you have visibility from end to end, allowing you to better manage your line. This visibility comes with support, too. If a shipment is late, we not only alert you but also provide alternative solutions if the delay is unworkable.

Higher visibility directly translates into greater customer satisfaction. You are creating a more efficient supply chain and thus saving costs that you can pass on to your customer. And, you can offer your customer more information because you will have visibility from purchase-order issue to end-user.

Inbound focus: Invoice management

When you have invoices coming in from multiple carriers, both inbound and outbound, it can get easy to pay them without analysis. While doing so will save you time, it won’t save you money.

The right 3PL will audit and pay your freight invoices for you, sending you one accurate, manifest invoice in the format of your choosing. If unfair charges are applied, the 3PL will mitigate the issue with the carrier for you and streamline your costs.

Use the time and money you gain from outsourced freight management to re-invest in your business, better your product, or reduce your end-customer costs to gain more market share.

Who benefits from your increased focus on inbound freight?

These days, if you’re a shipper with inbound freight, you can’t afford to keep your management of it on autopilot.

Inbound freight management is not just for a multinational company with a complex supply chain. Even small manufacturers would benefit from the reduced transportation costs and increased visibility that taking inbound freight management seriously provides.

And it won’t just be you and your business who realizes gains. After unlocking the benefits of strategic inbound freight management, you’ll also be able to provide your end-customers with faster, more holistic information and lower prices.

Wherever your business falls on this spectrum, speeding up its growth through better inbound freight management is available to you.

Charles Miller

Charles is the General Manager at Evans Transportation's headquarters.


Shipper’s Guide: Getting Logistics a Seat at the Table.

Get Yours Now

Subscribe to our Blog