How can truckload and LTL carriers maximize ‘good freight’ with a simple costing solution?
Authored by SMC³ on July 11, 2019
Truckload and LTL carriers throughout the supply chain know that every load and shipment is unique. SMC³, the leading provider of data, technology and education as an integrated solution to the freight transportation community, took its cue from these carriers when creating the Cost Intelligence System. The solution provides motor carriers with a unique tool that treats every load on its own merits and allows carriers to quickly, efficiently and accurately derive cost and profitability information from their operations.
SMC³’s CIS develops and delivers a model of each carrier’s operations and service areas directly from their own data, mapped to SMC³’s unit cost categories, so that ongoing updating can be performed quickly and efficiently. Multiple models for various accounting periods, and projected future levels of costs and performance, can be easily established using SMC³’s maintenance software.
In this short, three-question interview, Brian Thompson, SMC³’s chief commercial officer, sums up how the CIS solution assists carriers throughout North America, allowing for increased carrier profitability and operational productivity.
How does the Cost Intelligence System work?
We designed the Cost Intelligence System to provide a number of tools based on baseline data generated at the individual freight-bill level. Using programs tailored to either LTL or truckload carriers, users can generate the cost of moving each shipment or load from origin to destination. For LTL carriers, this personalized CIS data is supplemented by SMC³’s industry database of P&D stop-time and cross-dock handling performance information.
Carriers use CIS for two critical operations. First, they develop projected costs for moving freight, which arms them with useful data for both bid response and spot-pricing calculations. But they also produce an ongoing “costed” database of actual freight. That database is used to analyze the profitability of customers and other traffic segments.
How can carriers use the CIS solution to navigate current industry challenges?
We know the need to balance cost pressures with customer service is unrelenting. With CIS, carriers can quickly and easily identify which freight transported through a carrier’s unique service areas is “good freight,” which freight is unprofitable, and how to adjust that mix. This analysis also helps carriers establish a better rapport with customers and allows them to pinpoint areas to adjust rates, discounts and find areas to improve operational efficiencies.
By using each carrier’s actual operating data, the SMC³ technology solution shows carriers the true cost of the freight they move on a daily basis. The result is a unique set of data points – not a costing average. Carriers also use the activity-based freight costing model for deep operational analysis.
For carriers that already have an internal system, why might they think of switching to CIS?
CIS is unmatched in its ability to accurately analyze all costs associated with carrier operations. Internal systems may only give a cost average or lack the granularity of costing that CIS provides. CIS costs every shipment and load, accurately calculating costs, including balance, service requirements (accessorials) and a wide range of other factors. This creates a detailed, accurate look at profitability for all carriers – be they LTL, truckload, reefer, flatbed, tanker or carriers moving mixed equipment.
Current customers have told us they use CIS to increase the amount of data generated by their operations. Staying well informed by this data helps them achieve greater productivity – a bonus for carrier and shipper alike.
To learn more about SMC³’s Cost Intelligence System, contact a sales representative at sales@smc3.com and download the CIS case studies here.