Benchmark Freight Costs vs. Actual Freight Costs Impact Your Margins!

One of the hot transportation topics I receive questions about from users is the question of how freight costs are used with a TMS, which is especially meaningful for industries such as the food and beverage industry where margins are razor thin and profitability many times rests on the freight landed cost.

On outbound and inbound freight, FreightMaster and Dynamics TMS keeps track of many types of costs, but 2 of the primary freight costs are as follows:

1) Benchmark or A/R: What we call the benchmark or the freight cost component is that your sales or marketing team has included in the cost of the product. If you show the freight cost on your product invoice (PPA), then that is considered the benchmark.

2) Actual or A/P: This would be the agreed upon transportation provider cost you agreed to pay for a specific order. This can be and often times is very variable depending on economic conditions and carrier capacities.

The net difference, positive or negative between Benchmark and Actual will determine if a particular order is loosing money or making money on freight and will definitely impact bottom line margins.

If your company is a user of transportation services, the ability to proactively evaluate freight profitability is essential to the company's financial well being. Regardless of what brand of TMS or possibly Excel spreadsheet you are using, consider this strategy as mission critical.

How is your company managing this process?

Dynamics TMS Transportation Management Solution

Inverness, IL January 15, 2015 - We are very pleased to announce Country Pure Foods, Inc. (“Country Pure”), headquartered in Akron, Ohio has selected NGL's latest Dynamics TMS Transportation Management Solution to manage their multi mode transportation requirements in multiple plant locations in Akron, Ohio, Ellington, Connecticut, Deland, Florida and Houston, Texas. The solution allow Country Pure Foods to efficiently service its nationwide customer base and effectively implement inbound and outbound transportation management strategies

Dynamics TMS Transportation Management Solution for Dynamics GP

Inverness, IL January 20, 2015 - PolyQuest Manufacturing (“PolyQuest”), headquartered in Wilmington, NC has selected NGL's latest Dynamics TMS Transportation Management Solution for Dynamics GP to manage their inbound and outbound transportation. PolyQuest is North America's Leading Distributor of Virgin PET resin and Manufacturer of rPET Resins

FreightMaster TMS Transportation Management Solution

Inverness, IL February 10, 2015 - Bongards Creameries, headquartered in Bongards, MN has selected NGL's latest FreightMaster TMS Transportation Management Solution to manage their inbound and outbound transportation. Founded in In 1908, a group of enterprising farmers in Bongards, Minnesota formed the Bongards cooperative. Their goal was to craft the premium dairy products that the market demanded, and to offer the superior quality that area families deserved.

Dynamics TMS Transportation Management Solution for Dynamics GP

Inverness, IL January 23, 2015 - Echo Lake Foods (“EchoLakeFoods”), headquartered in Burlington, WI has selected NGL's latest Dynamics TMS Transportation Management Solution for Dynamics GP to manage their inbound and outbound transportation. Founded in 1941, Echo Lake Foods continues to operate as a family owned frozen foods manufacturer.

Next Generation Logistics Trademarks

FreightMaster TMS®, Dynamics TMS®, AzureTMS®, FreightMaster Express™, NGLNEXTStop™, FoodFreight™, OptiNet™, OptiFreight™, FreightMaster AMS™ and NEXTrack® are trademarks of Next Generation Logistics®, Inc.