A data-driven approach to cost savings
Authored by SMC³ on September 13, 2024
Optimizing LTL transportation spend with pricing analytics technology
For companies looking to improve their margins in an increasingly competitive business landscape, compromising on or neglecting the impact of shipping costs is not an option.
Illinois Tool Works (ITW) understands this well. The $16 billion global, multi-industry manufacturing enterprise has an annual domestic less-than-truckload (LTL) spend of approximately $80 million. As the Fortune 200 company fuels its path forward, they know their performance relies on best-in-class margins, and these margins depend in part on optimized transportation spend. Getting products to customers reliably using the most cost-effective options is key.
It takes data and analysis to arrive at optimal shipping decisions. Manually collecting and compiling pricing data can be tedious, time consuming and prone to errors. To uncover the full breadth of LTL savings and optimization opportunities, ITW needed a technology partner capable of helping them delivering large scale, automation-driven, real-time pricing analysis.
BatchMark® XL from SMC3 delivered this—and more. Here’s how.
The BatchMark® XL effect
BatchMark is a powerful batch-rating tool that expedites LTL analyses of current and historical freight spend. It enables quick and accurate rating or re-rating of LTL freight bills and uncovers insights into freight pricing scenarios like location changes, FAK, base rate changes and other factors.
BatchMark XL helps shippers manage pricing data by lane and carrier—quickly, easily and accurately.
Enriqueta Polonus, Senior Business Analyst at ITW, has used BatchMark XL for years to evaluate carrier data, provide analytic insights to the company’s various business units and uncover new opportunities for cost savings and carrier base refinement.
With BatchMark XL, Polonus and her team can deliver value across ITW operations through insights that illuminate potential areas of savings and other business opportunities. For example, when business units seek out her team’s expertise on a given strategy for improving freight costs, BatchMark XL streamlines the process of accurately validating that strategy with real data. And if analysts are seeing inflated costs, they can run data through BatchMark XL and use the insights the tool generates to propose specific ways to reduce costs in strategic business units.
In Polonus’ words: “We want to ensure integrity in our data. When we run things through BatchMark XL, it helps our quality control process and ensures the data we provide to our business units is correct.”
Lower costs, better results
In many cases, BatchMark XL has been integral to significant cost savings at ITW.
For example, when a particular business unit wanted to see if interlining could yield savings, Polonus and her team ran the data through BatchMark XL and quickly determined that, yes, the unit could save five percent annually on specific interline lanes. The business unit shifted lanes to interline and is now receiving partner pricing.
In another successful instance, ITW analysts used BatchMark XL to start a relationship with a new carrier. The new carrier had very selective lane acceptance criteria, but ITW analysts suspected that the carrier would be a good fit for a particular business unit with specific volume in a specific lane. After using BatchMark XL to analyze that single lane, they confirmed that they were looking at a 24 percent savings opportunity for that business unit.
A better path forward
Without BatchMark XL, Polonus says her team wouldn’t be able to optimize LTL operations across business units to the degree necessary for meeting ITW’s goals.
“Because we have BatchMark XL, we’re able to go through the analysis process more smoothly. We’re able to do more and take on more projects than if we didn’t have it. BatchMark XL is a big time-saver for us, and it really allows us to fully scope out projects.”
Looking for a complete LTL pricing analytic solution to streamline insights and drive informed transportation decisions that impact your bottom line? Learn more here.