Transportation Benchmarking Services for Shippers can be thought of in 2 aspects:
- Comparison of specific performance metrics against a network
- Comparison of specific rate information against a network
Whether a Shipper is trying to benchmark a particular metric or rate, we recommend drawing comparisons against similar Shipper networks that have comparable freight types, modes, spend, lanes, industry, etc. Utilize data services that focus on real-time market data and not those who utilize data from 6 – 12 months prior. Market dynamics and seasonality can shift carrier capacity, and therefore, rates in the process. Some Shippers prefer to benchmark contract vs. spot market rates specifically. It also depends on the TMS or the type of data warehoused internally to gain access to data points you wish to benchmark. Some TMS vendors provide this within the TMS itself, allowing Transportation Managers to understand how their process compares against other Shippers.
4SIGHT’s Benchmarking Services around rate information utilizes real-time data to do comparison benchmarking. Typically, a Shipper will have a need to do this prior to and potentially during a procurement bid event exercise. Or, a Shipper may be adding on specific lanes for which they have no baseline of comparison. Standard data templates can be utilized to obtain benchmark data fairly easily. Typically, standard lane data, mode, and equipment type or good starting points.
Once the benchmark data is obtained and analyzed, a Shipper can then determine:
- Where do I (as a Shipper) need to focus?
- How do I compare against the market?
- How are overall industry rates/metrics trending?
- Do I have a process in place to understand my performance on a weekly, monthly, quarterly, annualized basis?
4SIGHT’s Benchmarking Services related to performance metrics really depends on upon the Shipper’s process, lanes served, overall goals and objectives of the Transportation function in relation to the Company’s goals/objectives. Is it a profit center or cost center? Is service or cost most relevant? Performance metric guidelines for a particular Shipper is derived based on these factors. Once defined, the data inputs are gathered from either an existing TMS or manual spreadsheets. Data accuracy is verified and anomalies are identified to obtain a true picture of current state metrics.