Rate Savings Study

Folio Logistics rate savings study provides client significant monthly cost savings.

Folio was approached by a leading manufacturer and supplier to the maintenance, repair and operations (MRO) market and to the original equipment manufacturing (OEM) market to conduct a savings study, the outcome was significant.

THE CLIENT

As a major supplier to the international MRO and OEM market, this client prides themselves on having operations in 29 countries and distribution in more than 100 countries. Their success is attributed to their diverse distributor partner program and integration of strategically placed distribution points around the world. Major product lines provided to the MRO market include: facility identification, safety and complementary products, wire identification products and people identification. Major products for the OEM market include: high-performance identification products for printed circuit boards, precision die-cut components for mobile telecommunications devices and hard disk drives.

THE NEED

RATE SAVINGS STUDY
On a day to day basis, focus and resources are allocated to areas vital to the development of the core business, leaving little opportunity for in house process and market rate benchmarking. The client contacted Folio Logistics to analyze what effect rate changes and carrier changes would have on the client's monthly hard dollar savings throughout extensive and intricate distribution network.

Through their extensive and intricate distribution network, the need arose to outsource a study to Folio Logistics to highlight what effect rate changes and carrier changes would have on the client's monthly hard dollar savings. 

THE SOLUTION

The study scope encompassed Savings study based on over 20,000 client paid data records, a comparison was completed using a current benchmark rate set versus the clients previous rate base. Complete study and graphical representation of potential savings provided for each highlighted area of focus.

SAVINGS ANALYSIS
• Compared and contrasted prior rates, new rates and savings of various shipment types including inbound, outbound, third party and interplant for all distribution centers using pulled paid data
• analysis showed a total of over $2,300,000 savings

LOCATION SAVINGS ANALYSIS
• analysis of all locations including Canada, USA, and Mexico
• analysis of inbound, outbound, third party and interplant shipments
• analysis showed a total of $2,300,000 savings

MODE ANALYSIS
• analysis of modes included less-than-truckload, truckload, air freight, ocean freight, and intermodal
• savings for each mode represented graphically
• Inbound savings = $650,000
• Outbound savings = $1,180,000
• Third Party savings = $44,000
• Interplant savings = $460,000
• Total savings for all modes, total $2,300,000
• graph showed percent saved per mode including a line item description of savings per mode per month

LOCATION SAVINGS ANALYSIS
• analysis of all locations including Canada, USA, and Mexico
• analysis of inbound, outbound, third party and interplant shipments
• analysis showed a total of $2,300,000 savings

MODE ANALYSIS
• analysis of modes included less-than-truckload, truckload, air freight, ocean freight, and intermodal
• savings for each mode represented graphically
• Inbound savings = $650,000
• Outbound savings = $1,180,000
• Third Party savings = $44,000
• Interplant savings = $460,000
• Total savings for all modes, total $2,300,000
• graph showed percent saved per mode including a line item description of savings per mode per month

CARRIER ANALYSIS
• analysis of 73 carriers represented from the paid data
• included rate adjustments per the Folio team, showing amount saved or spent in excess of current rates
• output of information allowed client to examine current relationships with carriers in order to see where savings are located through the use of certain carriers by shipment type
• analysis showed a total of over $2,300,000 savings

SUMMARY
By analyzing actual paid data and rating and ranking current rates with proposed rates, Folio was able to assist the client in quantifying the impact of their new rate base. The client was then able to budget and reallocate over $2,300,000 in rate savings.. This study also catalogued the organizations savings on a monthly basis, by divisions, location, mode, and carrier. Folio's team of experienced and talented Logistics Professionals provided a thorough, accurate, and extensive study of their proposed rate adjustments, allowing the client to focus on their core business.