05 Dec Cost-Cutting Freight Audits Provide 2023 Supply Chain Savings
Cost-cutting freight audits from SSI provide you with something positive and certain in 2023: supply chain savings. As we all prepare for the year ahead, perhaps the one sure thing supply chain and operations leaders are certain of is uncertainty will continue to be an unwelcome nemesis. A host of challenges outside of your control are standing in the way of a return to normalcy.
Much like the graphic above, 2023 is front and center in our mind’s eye. Certainly by now, you have connected the dots to facilitate your global supply chain performance for next year. Yet, based on the fresh experiences of the past two years, we can assume there are unknown factors currently shrouded from view that will cause supply chain disruptions, potentially making a mess of all those well-connected dots.
As you take whatever measures are necessary to cut costs and improve supply chain resiliency, now is the time to connect with SSI. When we manage your global freight audit and freight payment services, you can be sure of this: SSI will provide you with substantial savings as you receive a constant flow of carrier refunds worldwide.
2023 SUPPLY CHAIN RISKS
According to a recent study of senior business decision-makers, the top three risk factors contributing to today’s supply chain issues are global political unrest, a lack of raw materials/components, and rising fuel/energy costs.
Inflation, high interest rates and changes in regulations and compliance are also major concerns. 1
Further, shortages of warehouse space and skilled labor, as well as changing consumer behavior are contributing to inventory management headaches as leaders try to get the right products to the right place at the right time.2
Also, transportation capacity continues to be uncertain, even as spot rates have dropped from stratospheric highs.
All these risk factors can be costly and taken together, the burden may be immense. It is unsettling. For your peace of mind, we recommend you call us today. Because in the midst of today’s high-risk/high-cost environment, some SSI customers are recovering tens-of-thousands of dollars every month.
Request a short, 30-minute SSIconnect online demo to see how our freight audit experts will save you money in 2023.
UNCERTAINTY CLOUDS U.S. & GLOBAL FREIGHT OUTLOOK
Thankfully, the severe West Coast port backlogs that tormented supply chain managers the past two years have mostly cleared. However, that port congestion, coupled with ongoing labor disputes at West Coast ports, have fueled record container-volume growth at ports in New Nork/New Jersey, Baltimore, Savannah, Jacksonville and Houston.
The geographic shift in container traffic affects rail and truck companies in a big way because much of their infrastructure is set up to haul goods from the West. For many supply chain and transportation managers, the congestion problem has merely shifted as East Coast and inland ports strain to process an abundance of goods.
Thankfully, spot rates for maritime, air, and trucking have dropped considerably. Yet, the aforementioned supply chain risks pushed many shippers to ink long-term shipping agreements that are keeping transport costs higher than the spot rates.
Plus, rising costs for fuel, equipment, insurance and wages are taking a toll on all transport companies, especially the smaller carriers. This may ultimately reduce competition and allow for higher rate increases even if freight demand softens. 3, 4
One trend to be aware of is ocean carriers sliding (delaying) or blanking (canceling) more sailings. Why? Doing so helps them boost spot rates and the tactics also reduce the carriers’ operating expenses. As Hapag-Lloyd CEO, Rolf Habben Jansen, recently shared on an earnings call, sailing one ship at 100% capacity is much more cost-effective than sailing two ships with 50% utilization. 5
As we wrote in a recent post, UPS and FedEx have already announced record-high 6.9% GRIs for 2023. It is reasonable to assume trucking companies will also try to push their contract rates higher. When a freight or parcel company announces their GRI, it is smart to ask, “How much is this really going to cost me?”. Typically, it’s more than you think. See our GRI analysis blog post to get a real-world understanding of how newly announced rates from each of your carriers will impact your freight spend.
IN 2023, UNCERTAINTY MAY BE THE NEW NORMAL
A year ago at this time, no prognosticators prepared the business world for all of today’s challenges. Just a few examples of recent “abnormal” surprises include these items:
- 2022 peak season vaporizing into thin air
- Steep diesel fuel prices and shortages
- Widespread supply disruptions in the automotive and semiconductor industries
- iPhone supply limitations impacting Apple’s revenue growth
- The prevalence of a “just-in-case” corporate sourcing model
- Downsizing at Amazon
- Layoffs and hiring freezes at big-tech companies. 6,7,8,9
So, we plan for the future as best we can with the knowledge that we are all living in a unique time where an elevated level of uncertainty is normal.
Of note, what each of the unexpected events outlined above have in common is they reveal an important need to save money. Cost-cutting freight audits and freight payment services from SSI enable you to save month after month, year after year.
To start saving now, submit the form at the bottom of this web page, or contact SSI directly and let’s talk.
COST-CUTTING FREIGHT AUDITS: LEARN MORE ABOUT SSI
A top freight audit provider, SSI serves the needs of supply chain, operations, logistics, shipping and finance executives. We transform the complexity of global freight audit and freight payment into cash savings and supply chain intelligence, providing actionable insights to maximize your profit potential.
- Customizable solution scales with your growing and dynamic business needs
- Automated freight audit drives savings to the bottom line
- Cutting-edge data visualization facilitates analysis
- Actionable business intelligence supports supply chain optimization and operational efficiencies
Include SSI freight audit and freight payment in your 2023 plans.
1. SAP News, New Research Forecasts the State of U.S. Supply Chains in 2023”, October 24, 2022, as published by SAP.
2. “Food shipping industry grapples with supply chain challenges”, October 26, 2022, as published by Supermarket News.
3. Katie Pyzyk, “A Clouded Outlook for Global Freight”, November 4, 2022, as published by Transport Topics.
4. Todd Maiden, “Carriers punt on rest of 2022, hopeful for market normalization in ’23”, November 10, 2022, as published by FreightWaves.
5. Greg Miller, “Hapag-Lloyd CEO: Container market volatile but not collapsing”. November 10, 2022, as published by American Shipper.
6. Craig Fuller, “For freight companies, this year’s peak will be weak”. October 24, 2022, as published by FreightWaves.
7. Dana Mattioli, Sebastian Herrera, Jessica Toonkel, “Amazon, in Broad Cost-Cutting Review, Weighs Changes at Alexa and Other Unprofitable Units”, November 10, 2022, as published by The Wall Street Journal.
8. Aaron Tilley, Apple Supply Crunch on Premium iPhone Threatens to Derail Record Sales Run”. November 10, 2022, as published by The Wall Street Journal.
9. Frank Holland, “There’s a major shift underway in manufacturing for U.S. companies”. November 4, 2022, as published by CNBC.
Post title: Cost-Cutting Freight Audits Provide 2023 Supply Chain Savings.