As part of the shipping process, load and delivery management metrics must be developed for each company and at times each load or shipment. Managers can calculate freight rate charge estimates to see what needs to be passed on to customers and what needs to be made up for elsewhere in the supply chain. Freight calculators can also help with budgeting to ensure suppliers, drivers, employees, and third-party members are all covered. The best freight calculator system allows for flexibility and can be used to focus on a number of specifics. Some of these include fixed-rate fees, fees based on geographical area, the total distance traveled, or any other specific metrics that can impact profit margins.
Why are logistics calculators so popular
Every shipping mode and method can benefit from access to accurate, real-time freight data. That is what freight calculators can offer logistics managers and enterprise shippers. For instance, consider these top uses of data and calculators within existing systems:
- Trucking metrics can benefit from clear data highlighting key areas of profit and loss within the fleet.
- Air cargo channels can more easily see peak times for travel, fees, delays and other key factors.
- Ocean freight managers will be able to easily calculate expenses vs profits to secure the best loads.
- Multimodal freight lines can keep closer tabs on fees and expenses within all channels.
- Domestic transportation networks can better collaborate load capacity to reduce wasted miles and space.
- International shipping lines will have access to accurate freight data and statistics for the entire network chain.
- Freight load managers can more easily see and predict shifts in profits and expenses.
There are some key points to consider when it comes to how freight calculator metrics can help improve supply chain operations, such as their ability to:
- Help ensure profitable freight loads.
- Make calculating and considering accessorials and fuel costs easier.
- Allow for faster freight classification and rate prediction.
- Promote collaboration within the network.
- Enhance scalability as well as adaptability.
And yet even with all the variety that exists, there’s always a new system or resource that promises to provide more data, more insight and more actionable value for carriers, brokers and shippers alike. Consider the value of system visibility and resource use made by Supply & Demand Chain Executive, “It’s an intelligence tool. Real-time supply chain visibility helps decrease costs, conserve working capital and improve efficiency – all through better understanding and management of supplier performance, warehouse optimization, inventory accuracy, exception control, transportation resource management, delivery velocity and on-time service.” There’s plenty that can affect landed costs. Thus, it’s equally important to understand how the freight management segments can apply an ROI calculator like the one in SONAR’s blog to assess whether such systems are worth the investment.
Using freight calculators for ROI of analytics and freight data resources
All calculators are great. They wouldn’t exist if they lacked value, but there’s another side to logistics calculators that logisticians need to consider. A freight calculator and advanced algorithms can be positioned to determine the return on investment (ROI) of a given resource, platform or dataset. Much like SONAR uses data to determine a rate forecast, the right freight calculator processes can make all the difference in the world.
For instance, consider the ROI examples below when looking at slight increases to mileage, load count or the rate per mile, dependent on the segment:
- Carriers can position the number of trucks, the miles per day per driver, and the average rate per mile, considering a few minor variances to understand the average ability to move more full loads and increase total revenue. For instance, a carrier portfolio with 8 trucks, driving 800 miles per day, charging $1.00 per mile, will incur a total daily mileage of 6,400 miles. Then, by only increasing the daily mileage by 1% and charging $0.03 more per mile, the weekly gain grows significantly, amassing $330 more per week.
- Shippers realize lower freight spend by effectively capturing a lower average cost per load. Assuming 100 loads per week and a $100 price tag per load would amount to $10,000 in freight spend, but evidence suggests SONAR users realize a savings of 2% through more informed and strategic carrier partnerships. As such, they realize a savings of $200 per week.
- Brokers could also realize the ROI of a freight analytics resource like SONAR. For instance, if 10 brokers move 100 loads per day and see an average margin of $100, increasing load count by 1 per broker per day and a $5 increased margin per load would amount to a resounding increase of $33,250 in revenue.
Explore the possibilities of better, more strategic freight management with SONAR
The world of logistics and freight management continues to undergo dramatic shifts in variability, disruption potential, digital transformation and more. The next age of supply chain management depends on the ability to maximize profit margins across each enterprise’s unique business goals, whether that’s keeping freight spend costs per mile as low as possible for shippers or pushing the upper echelon of per-mile rates as a carrier.
Regardless, the right use of freight calculators to quote, compare, plan and decide on the best course of action is the sure-fire way to keep your business moving forward. And since the calculators aren’t going anywhere, it would make sense to grow strategically with all other activities by using near-real-time data to transform small improvements into major business gains. That’s what SONAR offers. Request a FreightWaves SONAR demo to get started, or click the button below.