Oct 30, 2019
“We go in and look at your program. We benchmark it to what we know we can negotiate on your behalf and, by the way, our contracts that we negotiate are in our clients’ name. They’re not in our name. That’s important because the client owns the contract not us." ~Joe Barrer, Global Logistics, Inc.
It’s not often (if ever) that I get to say this episode comes with a free bonus offer!
But first, I sat down with Joe Barrer of Global Logistics, Incorporated (GLI) to talk about the future of transport, inbound freight management, and what a fourth-party logistics company can do to boost your bottom line.
“The fact that freight is free is a myth, quite honestly. There is no such thing as free freight and I think most distributors are aware of that,” says Joe.
What they might not be aware of, however, is the impact inbound freight analysis can have on a company’s financial health. He certainly wasn’t in his previous management role at an RV distributorship. That changed when GLI came onboard to analyze the company’s freight expenses.
“We were able to reduce our costs by $170,000 net the first year by taking over our freight,” he says of the work GLI performed.
In his current role as director of business development at GLI, Joe is an advocate for sitting down and doing the tedious, detailed work - there’s just no way around it if you want to reap the savings. That said, he understands the barriers to doing so.
“A lot of distributors simply don’t have the time to do this type of analysis so that’s where they get hung up. That takes a lot of time and effort.”
It might also require a cultural shift as changing the narrative between you and your suppliers begins well before the freight bills are scrutinized. “It absolutely has to be sold from the top down and mandated that this is the effort we’re going to put in.”
Beyond not having time to dedicate to a line-by-line review, many leadership teams don’t know how to review their data or negotiate on own behalf once results are in.
For companies going it alone, he suggests reaching for the low-hanging fruit first. “You’ve got to see if your analysis is correct and that you’re actually coming out ahead and also, quite honestly, some of the suppliers you might be buying from have better rates that you could ever get.” Those experiences with smaller suppliers provide information what adjustments need to be made and when it’s best to back off.
So, what about distributors who are ready to lower their freight costs but don’t want to perform the analysis on their own?
That’s where GLI comes in with an offer to evaluate shipping programs, benchmarked to the current market, free of charge.
It’s an excellent opportunity to see how a fourth-party logistics team can improve your company’s bottom line. “It’s a check-up from the neck up,” Joe says. “You have a group of outside people with over 235 years of experience...looking at your program and signing off on it or letting you know what it needs.”
Want to learn more about how you can negotiate with your suppliers? Interested in how labor shortages are impacting your freight costs? Want to know when driverless freight will hit the road? Listen in!
Distribution Talk is produced by The Distribution Team, a consulting services firm dedicated to helping wholesale distribution clients remove barriers to profitability, generate wealth and achieve personal goals.
This episode was edited & mixed by The Creative Impostor Studios.
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