Freight costs: how to use centralized data to boost profitability

Supply chain data is messy. According to J.P. Morgan Payments’ proprietary research, 60% of invoices are on paper. 

It's likely you lack a complete and accurate picture of your spend. As a result, your team is forced to make decisions based on incomplete data.

Legacy service providers try to provide insight but rely on rigid systems and manual processes that can't keep up with a dynamic industry.

Intelligent software like Loop aims to resolve these issues. Loop generates an accurate picture of your freight costs by unlocking premium data that historically has been hard to access. With it, you get the valued bird’s-eye view to easily spot opportunities to boost profit.

Here, we’ll break down how you can use high-quality data to save money. 

Improve decision quality with a central repository of your network data

Because supply chain data is spread across multiple systems and people, it’s difficult to access and unusable. Before you can start using data to decrease spend, you need high-quality data to understand performance.

Quality data sets the foundation to accurately monitor performance, identify big-picture opportunities to drive meaningful change.

Step one is understanding where key data lives and combining it into one central repository. Without access to every single document and its respective data points, you cannot make quality decisions at the granular level or at scale.

Many legacy tools will claim to do this, but their outdated processes (OCR, manual data entry, etc.) are insufficient for the dynamism and nuances of the supply chain. 

You need a solution that leverages logistics-AI. 

Optimize your network for maximum efficiency

Logistics-AI is a more accurate and efficient way to centralize usable, high-quality data. It’s flexible enough to gather all the data points relevant to your network, leaving no stone unturned. Here’s how it ensures accuracy:

• Ingestion: Logistics-AI solutions like Loop ingest data from any source or format – CSV, JSON, JPG, JPEG, PDF, PNG, or from EDI, API, and email. 
• Extraction: It extracts all relevant data, then cleans and standardizes it so you can make informed decisions from across your network.
• Standardization: Logistics-AI is trained to understand the inherent variances of supply chain data. This is critical when it comes to accurately standardizing data points like fuel surcharge, or UPS Next Day air vs Fedex Priority.  
• Linking: It links all data and documents from a shipment, with or without unique IDs to provide complete context.
• Insights: Logistics-AI automates cost allocation across GL codes, customers, lanes, and products, enabling granular cost analysis.

In doing so, it unlocks valuable data trapped in your shipping documents and spotlights opportunities for improvements in your margin, operating expenses, and working capital.

Aggregate data frees you from  making decisions in silos, and unlocks profit-driving decisions across your network.

Accurately adjust to changes in the market

For example, say your aggregate invoice data tells you that spot shipment fees are regularly popping up. Now, you can pinpoint the source of those expenses and amend your plans if they’re eating into your margin.

Use your strong baseline of data to negotiate for better discounts and confidently pick the right carrier for each lane. 

With greater network efficiency comes profitability. You’re able to make informed decisions to reduce your overall cost to serve. You can even start to plan for disruptions outside your four walls.

Build resilience and minimize risk

Freight rate fluctuations happen relatively quickly and can be unpredictable. Even small-scale incidents like localized inclement weather or major shippers like YRC filing bankruptcy can disrupt the market.

Long-term, comprehensive data helps you accurately plan for supply chain shifts. With it, you’re equipped to quickly shift gears with minimal disruption to your network.

Accurate data sets help build resilience and minimize risk. Let’s go a step further.

Reduce freight spend, unlock automation, and boost working capital

Effective freight spend management is dependent on clean, accessible, and explainable data. 

Stop overpaying on invoices

In the latest IDC Perspective, it was found that up to 25% of invoices include costly errors. Whether it’s an invoice that doesn’t capture discounted carrier rates or honor credits due to previous overpayments, there’s a good chance you’re overpaying.

A modern freight audit solution provides an in-depth look into each individual line item to ensure you’re not paying more than you should. When you do spot an overpayment, it’s easy to locate its origin and explain the exception to your logistics partner.

Use automation to maximize working capital

With a freight audit and pay solution powered by AI, there is never a question of the amount you should pay, how you should pay, and when you should pay.

Intelligent software like Loop tracks payment terms for each contract and ties it to an invoice so you never pay early or late, allowing you to hold onto working capital for as long as possible. 

Automated payments helps with:

• Invoice approval automation: Instantly approve invoices upon receipt to streamline efficiency by avoiding time-consuming manual workflows.
• Managing payment orchestration: Automatically age invoices to due dates and approve payments to be sent via ACH or opt for manual review.
• Ensuring financial compliance: Make sure you’re paying the right amount and reducing your overall risk by avoiding paper checks.
• Avoiding late payments: Find invoice discrepancies and resolve them quickly to minimize the risk of late payment fees.
• Tracking payment status: Track the status of a payment and instantly recognize when a payment doesn’t go through.

Using Loop’s automation, you are able to offer quick pay discounts, allowing you to unlock revenue-driving channels that counteract costs.

Loop improves spend visibility and cost control

The Loop platform is built for the industry’s shifting demands and is customizable to your unique supply chain. 

Powered by logistics-AI, Loop enables you to manage your spend across your entire network, give you the upper hand in contract negotiations, improve carrier relationships, and boost profitability.

Get control of your costs and contact Loop today.