7+ Freight Cost Analysis Templates – PDF, Word

freightcostanalysis

In the current business environment, entrepreneurs continue to look for ways to cut down or manage costs and exercise better control in business expenses, in addition to continually increasing sales and maximize profit in the process. Part of what makes up much of your business expenditures is your freight cost analysis, which easily accounts for 10% of an organization’s expenses, according to research. You can also like analysis templates.

It is therefore very important to evaluate not only what you spend on product delivery but the benefits that come with it as well. The lowest cost for shipping may not even be the major determining factor for choosing freight transport and the cheapest option available may actually be costing you more in the long run, just when you thought you’re able to save money by going cheap on the shipping method chosen. You can also see operation analysis templates.

Freight Cost Analysis Template

freight cost analysis template
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Analysis Framework for Freight Transportation

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Analysis of Costs of Trucking

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Freight Benefit Cost Analysis

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If you haven’t taken a step back to assess and analyze transportation costs for your freight, now may be a good time, since it is a daily part of your business and may also be part of what’s keeping you rooted to your current position in the industry instead of being able to move forward. You can also read sample situation analysis templates.

The Shipment Transport Sector

The transport industry have always been an important part of the economy owing perhaps to its intensive use of infrastructures and is easily a common tool used for development, even more so in the present global economy where economic opportunities are more and more triggered by the mobility of consumers, goods and the pace to which information is being passed or shared. The relationship between the quality and quantity of freight infrastructure and the level of development in the economy is becoming more obvious. You may also see business needs analysis templates.

When transport systems are operating efficiently and goods are delivered on time, they provide opportunities and benefits which can result in better access to various markets, employment and for some, additional investments. In the case of companies or businesses who rely on freight for transporting goods and getting them delivered on time, analyzing shipping costs is a necessary strategy to ensure not only customer satisfaction which is crucial in competition and generating profit and sales.

Challenges In Analyzing Costs

Carriers in the trucking sector, as well as shippers, continue to look for alternatives in combating the rising costs of their business operations but they usually don’t have a good understanding of proper benchmarking let alone freight or transportation cost analysis and proper management of profit and how all of these are connected. Without the knowledge of true costs and without knowing how to utilize benchmarks as what they are-benchmarks, shippers and carriers of goods for various companies will continue to struggle in effectively analyzing and cutting down costs to help them grow their business without having to worry about the rising prices of freight services on top of other operational expenses.

For a shipper, a trucking business, or logistics firm to maintain or gain profitability, their managers and owners must have a good knowledge of pricing for purchased good transportation so that they can find better ways to make their expenses in line with their projected profitability. Relying on industry estimates and averages when creating a freight cost analysis to evaluate success in the business would not only lack accuracy but can also be damaging in a worst-case scenario. If you need further assistance and aren’t too confident in conducting your own cost analysis for trucking or transportation of goods, you can contact or hire a qualified consultant to do it for you.

Freight Benefit Cost Methodology Analysis

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Transportation Cost Analysis

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Factors to Consider In Your Freight Cost Analysis

Whatever cost analysis you do will always factor in the need for shipping. Additionally, in getting your product transported from its origin to its destination, you would have to take into account the speed of delivery, damage during shipment, tracking capabilities of the shipper, the ease of delivery and the way to which the carrier deal with shipping issues, especially during ad weather. You may also read requirement analysis templates.

These things affect not only your production and customer base but also the customer service itself, even though technically, you hold no control over so many of these factors. The thing is, the customer wouldn’t know that, and as the company where they do business with, this is your responsibility, as far as they’re concerned.

1. Hard Cost

The first step towards analyzing your freight costs is to find out what the base cost for shipping goods are. As any other goods-producing company, you would most likely be receiving the most competitive bids or price services for top carriers such as FedEx, UPS, and the Postal Service. One important criterion for comparing costs between these firms is the dollar cost for shipment of products from Point A to Point B. You may also read business gap analysis templates.

Other than the shipment cost, you have to include insurance for the service, pick up, preparation, fees for oversized or bulky packages and any other added costs on the table. If, for example, you’re using your own delivery vehicles, do the math for a driver, router and truck loader pay including benefits, insurance, truck fees, maintenance, gas, tires, repair, etc. You may also read customer analysis templates.

2. Benefits

Aside from getting your products delivered to the customer’s door or for pickup at a depot, you also have to consider other shipping needs so that you can have a proper calculation of your overall shipping costs. For instance, you might want to go for the cheapest option which could also easily be the slowest. This is not an issue if you can get your products made early and still be able to deliver it on time. Otherwise, you might lose customers with late deliveries and have angry vendors hounding you for disputes. You can also like sample organizational analysis templates.

In this case, your lowest price option may instead jeopardize your business and cost you more money in the end, if you go low on sales upon losing customers. If you choose to produce expensive products, you might not be able to afford replacements when they get damaged while in transit. Here’s how you can manage it. Deduct the cost of your calculated average potential damage during delivery from the cost of savings you get from delivery service or shipper that’s less reliable but cheaper to check if it’s worth going cheap for. You may also read financial analysis samples.

3. Service

Different shipping companies provide different levels of customer service. Others can only provide estimated dare for delivery while some can give you real-time tracking of shipment. There would be shippers who are able to contact their drivers 24/7 while others have to wait until the drivers themselves call in to provide updates. Some include loading and unloading your package with their service, while others leave that as your or your vendor’s responsibility. You may also read customer analysis templates.

Before finalizing your analysis, you must, therefore, consider the overall services shippers offer to find out if you’ll have added costs or be more open to the possibility of delays. In the event that your carrier requires you to take your product to their facility, consider your staff, time and mileage expenses to their cost. You can also read hazard analysis templates.

4. Cash Flow

If faster delivery results in quicker profits gain or sales achieved and faster vendor payments, consider that in doing your freight cost analysis. You can work with your accountant to evaluate how soon you’ll be able to get the cash when using each option for delivery. Determine if your payments will arrive in time for you to cut enough interest payments on debts so that you can put a more expensive shipper to good use and take advantage of the service they offer. Being able to get cash in a lot quicker may just be your answer to order more materials or supplies easier thereby making or producing your products sooner than normal and increase sales in the process. You may also like printable project analysis.

Freight Benefit Cost Study Analysis

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Freight Transport Costs Analysis

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A company that wants to be successful must have its expenses planned according to its profits, treat every transportation and in some situations, exercise proper freight management and know before dispatching every truck or going through your routes regardless of making profit each time it is on the road for dispatch or pickup. You may also like sample market analysis.

Currently, there are very little drivers for freight profitability, costs continue to rise considerably and staying ahead or keeping up with the curve of technology while trying to grow a business can just be too much to handle. Having enough awareness of benchmarking and being committed to an accurate profit performance management can provide a roadmap for the future of your business. It will be so much easier when you conduct a proper freight or transportation cost analysis that would give you a chance to stay ahead of the game and manage a business that would have stable profitability and growth for the long term. You may also like analysis examples.

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