The Category in Brief

Freight and Transportation Services can be a significant expense for manufacturers.  The frequency and size of shipments can have a significant impact on these costs.  The Freight and Transportation Services category typically includes larger volume and more frequent shipments, not made by UPS or FedEx.  Service providers in this business offer multiple modes of shipping, including:

  • Inbound And Outbound Freight
  • LTL (Less than Load) Shipments
  • TL (Truckload) Shipments
  • Rail Transport
  • Air Freight
  • Ocean Cargo
  • Inter-modal transportation (ocean, rail, truck)

The Challenges for Buyers

In many cases, inbound and outbound freight are purchased separately.  Staff managers and customer service people typically purchase outbound freight.  Inbound freight costs are often hidden in materials costs (e.g. FOB Delivered). Buyers of freight typically have a narrow view of the entire enormous national freight market.  Most transactions mid-size companies make are brokered with 3 or 4 broker partners.  Transactions may include 2 or 3 levels of brokerage.  Loads are often quoted before equipment is secured.  This leads to “sorry, I lost the load” calls from brokers when they can not find a carrier to cover.  Because of this complexity, sellers typically ‘mark up’ freight by 20 to 30% to cover cost of managing the category.  At the same time, Materials buyers are usually focused on materials cost.  Delivery is secondary and often handed to sellers to manage.

TPDgroup Can Help

We have partnered with leading freight services companies nationwide to provide our members a complete Freight Management System.  Members save between 10-40% on their freight costs.  Our contracts offer industry-leading practices, including:

  • Contracted fee based transactions.
  • Consolidated Freight Payment
  • Best in industry information system
  • Access to freight even when the supply of trucks are tight
  • 100% coverage
  • Claims management

Contact us for a FREE Benchamark Analysis of your Freight and Transportation Services expenditures.