German Home Care Company: Conducting a freight diagnostic review to unlock cost savings and improve service efficiency

Key challenges

Inconsistent charging and service standards: The client was experiencing inconsistencies in charging mechanisms and service standards/carrier performance across its grocery and major client channels.

Uncertain value in product deliveries: Large volumes of product were being delivered into major grocery networks by their respective primary freight offerings across all regions, though it was difficult to gauge the value being added to its supply chain via this model.

Impact on major client channel: Volumes delivered to client’s major channel had been impacted by incumbent provider IT security breaches and poor service.

Our approach

TMX was engaged to perform a freight diagnostic through:

• Freight rate benchmarking: TMX’s benchmarking of freight rates identified opportunity for pure price cost reduction.
• Initiatives beyond pricing: TMX was able to identify both strategic network and tactical process improvement initiatives independent of and complimentary to pricing opportunities tabled.

The results

• The diagnostic review identified circa AUD~$500K in pure freight pricing opportunities, and circa AUD~$900K in strategic and tactical improvement initiatives for the client to pursue.
• Subsequent to the diagnostic being completed TMX was engaged to conduct an Australian domestic freight RFP across all services delivering to grocery and major client channels.