Freight analytics: 4 ways to use insights to increase revenue
Freight analytics are huge assets for boosting profits and stronger business decisions. The trick is gathering that data into one place. Here’s how you do it.
Anastasia Fullerton
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5 minutes to read
Odds are you constantly collect data from across your freight network to run freight analytics.
Yet, no matter how diligently you try to organize data, it’s often inaccurate, incomplete, and inconsistent because it comes from different sources and formats.
The result is siloed data with mismatched values and surprise accessorial costs. So, how do you properly collect, unify, and utilize data for better real-time freight analytics?
In this article, we’re defining freight analytics, looking at its benefits, and covering how you can get started.
What is freight analytics?
Freight analytics examines large datasets of shipping data to identify insights across your supply chain and help best address market trends. Shippers use this information to track freight costs, find opportunities to drive growth, and plan for disruptions.
Before you get started, you need to centralize all of your shipment data. This takes four core steps.
Collect your data sources: get together your physical paper documents (BOLs, invoices, etc) and/or digital data streams (EDI and API)
Extract data: pull the data from your different sources and formats into one system
Standardize your data: make the data consistent across your formats and sources, i.e., Carrier A uses "region" and Carrier B uses "state"
Map key data points together: each document and source has different tracking IDs that link to assets together, i.e., link tracking IDs across different legs of your shipment.
Then you can analyze past, present, and future transportation performance in four core analyses:
Carrier performance analysis: Define key performance indicators (KPIs) such as on-time delivery rates, total spend, route performance, and invoice discrepancy rate to establish carrier performance baselines. Then you can identify areas for opportunities, e.g., track which carriers give you the best net price, not just the best rate discount.
Cost analysis: Track and allocate all transportation spend, including fuel, accessorials, linehaul, etc. Analyze and audit these costs by invoice, lane, carrier, and GL code so you can make cost-based decisions. For example, ensure you have made the optimal routing decisions (e.g., your rates or your suppliers’ rates) with supplier’s inbound freight.
Network optimization: Analyze your entire transportation network in a single, standardized view to identify patterns and trends. This will help you uncover strategic insights that save you money so you can reinvest these funds to drive growth.
Predictive analytics: Use your data to test future situations of your transportation system through scenario planning and risk analytics. You can experiment with different network constructions using scenario planning to make informed predictions on future performance. Risk analytics use freight data to explore and improve your supply chain resilience.
Freight analysis provides powerful insights to improve your decision quality so your transportation doesn’t drain your profits.
7 benefits of freight analytics.
These are some of the ways you might experience the benefits of clear and comprehensive freight analytics:
Identify and resolve issues quickly with real-time data in a centralized view.
Eliminate unnecessary spend by identifying insights from freight analytics and mismatched freight rates in audits.
Boost productivity by automating audits with high-quality data and clearly defined business rules.
Streamline your logistics managers’ efficiency and reduce future error rates by running root-cause analyses on issues.
Reduce the impact of disruptions by turning insights from predictive analytics into actionable plans.
Improve margins by understanding the cost associated with every decision.
Strengthen carrier relationships with complete transparency on performance, compliance, errors, and resolutions to boost productivity.
4 key data levels of freight analytics.
At Loop, we know the power of using freight analytics to find insights that improve operations. However, your insights are only as good as your data. So you need to get high-quality data across four key levels for your freight analysis:
Shipment Documents
You must centralize all shipment data to get a complete view of your freight network. Legacy systems, documents, and processes keep data trapped in disconnected formats and sources, such as paper BOLs, invoices, and packing list PDFs sent to your inbox. It can be a challenge to gather and store this data but it is the foundation of freight analytics.
Invoices
Centralizing your invoices and pulling out financial data enables you to tie all decisions back to cost. This visibility helps you identify billing errors, fraud, and top accessorials, among other things. By drilling down to the line-item level, you can quickly find and resolve issues, reduce risk, and make better financial decisions.
Contracts
Contract data is crucial for analyzing carrier performance, monitoring contract term compliance, and ensuring you only pay what you owe. These agreements define the relationships and expectations between shippers and carriers, shippers and 3PLs, and 3PLs and carriers. Complete transparency helps every stakeholder build better relationships. Freight analytics helps teams understand if their contract terms are meeting their needs.
Network
You can run freight analytics across a single carrier or single mode, but without centralized network data, you're hurting your supply chain's performance. Centralized network data empowers you to find strategic network insights that increase margins.
Best-in-class supply chain companies track market conditions and use analytics to simulate the potential impact of market swings on their networks. This is why having access to data from all modes of transportation across your entire network is crucial for successful supply chain management.
How should you use freight analytics?
You’ve gathered all this data and started to run analyses, but now what?
De-risk decisions
You improve your decision quality when you invest in unifying and enriching transportation data. More accurate data enables you to streamline processes and automate basic decisions, freeing up your time to focus on strategic projects that have a meaningful impact on your business.
Eliminate unnecessary costs
Total transportation spend visibility is the only way to ensure you have healthy margins. Freight analytics and audits are essential tools to eliminate overpayments and ensure you’re making the most of your money. Analytics help you identify areas for consolidation or improvements. Audits compare expected costs to invoiced costs to identify invoice issues. Modern auditing workflows are automated and run root cause analysis to explain discrepancies and expedite resolution. Granular data saves time and money.
Optimize transportation budgets
The beauty of granular freight data is that you can look at your network from multiple perspectives, whether it’s comparing carrier performance or assessing SKU-level profitability. Analyzing data from different angles provides a deeper understanding of your supply chain performance and its associated costs.
This information empowers you to negotiate better carrier contracts, allocate funds to improve your return on investment, and ensure each shipment and SKU positively impacts your bottom line. Freight data gives you a complete view of your freight spend so you can continue to improve your margin.
Plan for network disruptions
No one can predict every change in the transportation industry, but analytics can help you test potential scenarios to understand your network's resilience. Use these findings to assess how disruptions could impact your operations and plan accordingly.
Build fail-safe plans to mitigate the impact of predictable risks and quickly analyze your data to figure out how to resolve unpredictable disruptions. That way, when there’s a change, like 2020’s supply chain disruption, you can lean on your data to determine the best course of action to keep business operations running as smoothly as possible.
Gather, store, and use freight analytics to save money with Loop.
Freight analytics from disparate sources creates data silos. You need a centralized view and analysis of your freight network to make accurate and high-quality decisions. Without complete supply chain spend visibility, you risk draining your profit.
Loop’s domain-driven AI seamlessly digitizes and centralizes all of your transportation and spend data so you can easily track key financial supply chain metrics. Our modern platform automates and pay workflows and surfaces strategic insights that unlock profit trapped in your supply chain.
Curious to learn how Loop can reduce your transportation spend? Contact us today.
