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What do you need to Know about Freight Cost Benchmarking?

Freight
Freight

In the post-pandemic era, the shipping environment is changing globally. It means that the shipper needs to be a step ahead of others to keep in place. In the freight forwarding industry, across the land, rail, air, and ocean freight, new changes are happening daily, and the rates are also highly volatile. Individual shippers may face many unforeseen obstacles, change in roster, delays, and all of these falls to the freight services to ensure that they have a flexible and agile supply chain. This is where freight associations become important. Being a member of such associations, it becomes easier for freight forwarders to collaborate effectively and ensure quick and cost-effective freight movements.

Keeping this supply chain network flexible depends largely on many parameters. It needs more accurate and up-to-date technologies and market intelligence. While the shippers can shop around for various offerings, they also need access to the live freight rate benchmarking to come to conclusions. No matter what the size and extent of your shipping outfit are, benchmarking freight cost with market intelligence should remain the top priority of supply chain management. While marketing intelligence is a self-explanatory concept, benchmarking freight costs may be a bit complicated to many. Let’s explore it in more detail in this article.

The concept of freight benchmarking

The primary objective of benchmarking alliance freight cost is to understand which business holds the highest marks in terms of performance and to explore what metrics drive the performance. By understanding these fundamental drivers of performance, it will be easier for the shippers to make necessary changes in their operations.

Simply put, freight cost benchmarking is the process of comparing the freight costs which you are paying with that what others are paying. Comparing the costs and going for the best available in the habit of responsible business owners. You need to always ensure that you have access to the most reliable and updated market rates, which is not a straightforward process always.

Benefits of benchmarking

As the experts may tell you, the ocean cargo market is a highly volatile industry. Even on the same lanes, the rates of ocean freight may largely vary. The more you pay, three could be many hidden charges being buried in the first copy. Not only will these charges drive up the overall shipping costs, but you may also be compelled to force them upon the end customers. This is one major reason why it is vital for the shippers to go for benchmarking with access to the actual market data. It also offers a better insight into the overall shipping industry and, in many cases, leverages the benefits of negotiating for better freight rates with the carriers and association partners.

As a result of benchmarking, lower your shipping rates would be, and also you will be able to run a complete analysis to be in a better position for stronger negotiations. As there is high competition in the shipping industry, too, you stand a better chance to get the best possible rates and gain a competitive edge in cost-saving and speed related to freight forwarding.

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