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Despite what your parcel carrier representative tells you, you could probably be getting better pricing. How can you be certain your rates are truly best in class?
Try benchmarking your carrier rates and services against other shippers. It works. For instance, your carrier contract negotiations might go a little differently if you knew you were getting the worst incentives in the area.
Or you might have more leverage if you know that three-quarters of peer companies had negotiated a discount on a surcharge - the same surcharge the carrier rep told you is never discounted.
Most shippers could improve their transportation discounts; rate benchmarking helps you understand what's truly possible and how your rates stack up against others. So how do you start a benchmarking program?
As we discussed in the article "Benchmarking transportation rates and services" (February issue), benchmarking is simple: Monitor your company's internal measurements and compare this data with other top organizations.
The gaps between your actual performance and that of industry leaders are where you need to improve. You need to evaluate progress and trends over time to achieve your target objectives.
Effective use of benchmarking enables shippers to enjoy an advantage over competitors now and into the future. Here are five steps to an external benchmarking program.
STEP 1.
DECIDE WHAT TO BENCHMARK
You need to start by deciding what aspects you need to benchmark before you determine against whom you'll benchmark.
There are many free or low cost online tools to compile data and survey benchmark partners. Select a tool, then develop a survey that solicits rate, service usage and contract information. Use strategies, such as ranges and "yes or no" questions, to...