Logistics Audit & Freight Cost Control - An $825M manufacturer of water heaters was a facing a double-digit logistics cost increase against single-digit net sales decline and needed a “fresh set of eyes” to evaluate operations and find cost savings, targeted at 10% of a $100M budget.

The approach comprised a comprehensive process review and data analysis from order to shipment, emphasizing load planning, transportation execution, fleet operations, and freight policy, which was conducted over 4 months. Solutions called for implementation of load optimization, in-sourcing transportation management and implementation of software (TMS), improved carrier management practices, ending a dedicated fleet service contract, and compliance with customer freight policies. During the project, both software packages were selected and implementation initiated, along with training on carrier selection and freight policies.

Truckload capacity utilization increased from 65% to 80%, saving $3.3M. In-sourced transportation management saved $1.4M with a 4-month ROI on TMS. Carrier consolidation, rate negotiations, and training resulted in 20% cost savings or $2.4M of relevant spend. Terminating the fleet contract saved $1.6M. Freight policy compliance would save $5.6M, excluding efficiency savings from consolidated customer orders. Total expected cost savings exceeded $14M.