How a Simple Cost Intelligence System Can Maximize ‘Good Freight’ For Truckload and LTL Carriers

Cost Intelligence System

Truckload and Less-than-Truckload (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 Cost Intelligence System (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.

1. 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.

2. 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. 

3. For Carriers That Already Have an Internal System, Why Might They Think of Switching to a Cost Intelligence System?

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.

Related Article: CEO Panel Addresses Various Freight Transportation & Logistics Market Issues

To Learn More about SMC³’s Cost Intelligence System and other Product Solutions, Download Read these Resource:

Cost Intelligence System: 3 Case Studies New!
In these 3 case studies, Old Dominion Freight Line, Averitt, and Groendyke Transport, we take a deep dive into the activity-based solution and how SMC³ improves the LTL motor carrier’s costing capabilities and enhances profitability. Download Now!

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Bid$ense: Streamlined Transportation Sourcing
This paper details how using Bid$ense leverages SMC³’s lifetime of transportation purchasing knowledge, allowing customers to incorporate pricing, claims ratios, on-time performance and transit times into their LTL bidding analysis. Download Now!

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Why eShipping Selected the SMC³ Platform for Transactional LTL API Connectivity
In this case study, Chad Earwood, CEO of eShipping, describes how they integrated the SMC³ platform for transactional LTL API connectivity, and by using the analytical APIs RateWare XL and CarrierConnect XL they are able to obtain immediate LTL rates and audit LTL pricing. Download Now!

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Strategic LTL Bidding for Minimum Cost & Maximum Efficiency
This paper details how SMC³ designed Bid$ense for complete procurement transparency, and how you’ll move ahead with ease and confidence toward best-choice carrier qualification and truly strategic LTL procurement. Download Now!

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The Case for a Re-Indexed LTL Benchmark Pricing System
This paper takes a deep dive into SMC³’s CzarLite XL, an advanced pricing system solution that gives shippers, logistics service providers and carriers a new neutral benchmark choice when negotiating LTL shipping rates. Download Now!

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The Single Source for LTL Pricing & Transit Information
The SMC³ Platform empowers 3PLs and Shippers of any size to successfully navigate and optimize the LTL shipment arena, choose the level of computing power based on your specific needs and operating environment with a technology platform offering the best of all worlds. Download Now!

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