The Value of Transportation Audits: What They Cover and Save

Companies avoid transportation audits, and what they don't know can hurt them

When it comes to your supply chain, the health of your freight transportation operation is pretty important. It eats up the largest chunk of your logistics budget. Still, companies avoid transportation "check-ups." Among the top reasons:

• I don't have time (no surprise, the top reason)
• Nothing's wrong
• No one's bugging me, so I'll put it off

With transportation audits, unless you ask the questions and run the right tests and analyses, you simply don't know. And that lack of knowledge can and should be unsettling, particularly if you are relatively new to an organization and don't know how you "stack up" relative to competitors or best-in-class operators.

Over-the-road transportation is 47% of logistics spend, so executives will ask

Over-the-road transportation accounts for 47% of a company's total logistics spend, according to CSCMP's State of Logistics Report. That makes it a hot button issue with c-level executives. Sooner or later, they'll begin asking questions like these:

• "Do we need a transportation management system?"
• "Are we paying too much?"
• "Why do transportation costs keep going up?"
• "Do we need all these people?"

When they do, you'll want to have the answers.

Transportation audits provide guidance on both strategic and tactical issues related to freight transportation. They can help you articulate a very clear vision to your company about where you are today with your freight program, where you need to be to support profitable growth, and how to get there.

What a transportation audit covers: every element of your freight operation

Transportation audits involve a comprehensive analysis of every element of your freight operation. Questions an audit would address include:

• Can you hit service level targets with your current distribution network?
• Are you using carriers that offer the best service at the best rate?
• How do your staffing levels compare with those of similar-sized companies?
• Do you have the correct personnel in place to take you into the future?
• Can you lower your freight rates?
• Do you have the appropriate technology employed to optimize freight movements and capture data?
• Can your current program support future growth?

People: an outside expert can objectively assess the team you work with every day

You can have the vision, the strategy, the systems, the processes and the determination, but if you don't have the people on your team to make it happen, your transportation operation will fall short of your expectations. That's why it's so important to continuously assess your talent and add or replace as needed.

These are tough decisions, and it's hard to be objective in assessing the capabilities of people you work with every day. That's why it helps to have an outside transportation expert come in to assist with these evaluations.

They can tell the difference between managers with 10 years of experience and those with 1 year of experience, repeated 10 times. They can also benchmark your staffing levels and determine if automation or process changes can reduce manpower.

They can tell the difference between managers with 10 years of experience and those with 1 year of experience, repeated 10 times.

People questions an audit can address

• Is staff constantly seeking new and better approaches, or have they become complacent?
• Can your staff take you to the next level of quality and efficiency?
• Are your salaries in line with the industry average for specific functions?
• How should you manage younger staff members differently to maximize performance and retention?