Direct Cost Reduction: 8-15% Transportation Spend Savings
Enterprise shippers implementing comprehensive managed transportation services consistently achieve 8-15% reduction in total transportation expenditure within 12-18 months. This savings derives from multiple sources:
Better base rates through volume leverage: 3PLs managing freight for multiple shippers negotiate carrier rates 5-12% below what individual shippers secure. A national LTL carrier might offer 65% discount off published tariffs to a shipper moving 50 shipments weekly, but provides 72% discount to a 3PL managing 500+ daily shipments across its customer base.
Accessorial cost reduction: Less-than-truckload freight invoices average 15-25% higher than quoted base rates due to accessorial charges—detention fees, reweigh charges, address corrections, liftgate services, and residential delivery fees. Managed transportation services reduce accessorial expenses by negotiating lower accessorial rates, establishing clear billing protocols, and implementing operational changes that minimize occurrences. For instance, improving dock scheduling reduces detention charges, while address validation systems eliminate redelivery fees.
Mode optimization: Many shipments move via suboptimal transportation modes due to lack of time or expertise to evaluate alternatives. Managed transportation services analyze every shipment to determine the most cost-effective mode. A 2,500-pound shipment moving 400 miles might cost $650 via LTL but only $425 via partial truckload—a 35% savings that requires knowing regional carriers offering volume TL service.
Freight audit recoveries: Automated invoice auditing identifies billing errors, duplicate charges, and rate discrepancies. Industry data indicates 8-15% of freight invoices contain errors, with managed transportation services recovering $600-$1,200 per $100,000 in annual freight spend through systematic auditing processes alone.
Operational Efficiency: Labor Cost Reduction
Beyond direct freight cost savings, managed transportation services reduce internal labor requirements for transportation management. A manufacturer shipping 100+ loads daily might employ 3-5 full-time logistics coordinators handling carrier calls, tracking shipments, resolving delivery issues, and processing invoices.
Managed transportation services consolidate these functions through TMS automation and dedicated 3PL support teams, allowing internal staff to focus on higher-value activities like supply chain strategy, vendor relationship management, and customer service excellence. The fully loaded cost of logistics staff, including salary, benefits, training, and office infrastructure, typically ranges $75,000-$95,000 annually per person. Reducing headcount requirements by even 1-2 positions generates $150,000-$190,000 in annual savings.
Service Level Improvements: Customer Satisfaction Impact
While cost reduction captures initial attention, service improvements often deliver greater long-term value through enhanced customer satisfaction and revenue retention. Managed transportation services improve on-time delivery performance through better carrier selection, proactive exception management, and systematic performance monitoring.
Research on supply chain management practices demonstrates that improving delivery reliability significantly enhances customer retention, with delivery accuracy emerging as one of the strongest predictors of customer loyalty.1 Likewise, improving on-time delivery performance from 92% to 97%, a typical improvement with managed transportation services, reduces customer service issues and strengthens customer relationships, protecting revenue from improved retention.2 For a distributor with $50 million annual revenue, this translates to $6-7.5 million in protected revenue from improved customer retention.
Risk Mitigation: Capacity Assurance Value
During the 2020-2021 capacity crisis, spot market rates spiked to unprecedented levels—with dry van rates climbing above $3.00 per mile compared to pre-pandemic averages around $2.00 per mile, according to DAT Freight & Analytics market data.3 During such capacity crunches, shippers without managed transportation services and established carrier relationships face load refusals, production delays, and must resort to expensive spot market purchases to maintain operations, as documented in Bureau of Transportation Statistics freight performance data.4
During capacity crunches, trucks become scarce. Spot rates on certain lanes,spike 40–100% above contract levels. Shippers without managed transportation scramble for capacity. Loads are refused. Production slips. Premium services become necessary.
Managed transportation providers maintain deep relationships with thousands of vetted carriers. They secure capacity even during market disruptions. This capacity assurance acts as insurance against supply chain failure. The value becomes clear during port strikes, severe weather, and peak season surges.
Transportation Management System (TMS) Technology
Having ViewPoint TMS integrated into your ERP is absolutely critical to realize savings. API connections to enterprise systems automate data flow between order management, inventory systems, and transportation management. When warehouse management systems generate pick tickets, the TMS automatically creates shipment records, eliminating manual data entry. Research from MIT’s Center for Transportation & Logistics demonstrates that sophisticated TMS platforms enable shippers to manage complex procurement processes more efficiently through automated carrier selection and real-time data integration.5
The shipping technology platform forms the operational foundation, providing these essential capabilities:
Multi-carrier rating and comparison: Shippers quote shipments across 50+ carriers simultaneously, viewing side-by-side pricing that includes base rates, fuel surcharges, and applicable accessorial charges. The system automatically selects the lowest-cost carrier meeting service requirements unless shippers override with manual selection.
Automated load tendering: Once shippers approve shipments, the TMS electronically transmits pickup requests to carriers via EDI (Electronic Data Interchange) or API connections, eliminating phone calls and email exchanges. Carriers confirm pickup appointments automatically, streamlining communication.
Real-time tracking with exception alerts: GPS and EDI status updates provide current shipment locations, estimated delivery times, and proactive alerts for delays or service failures. Customer service teams access this information through the TMS portal, answering “where’s my freight” inquiries instantly rather than calling carriers.
Document management and imaging: Bills of lading, proof of delivery, rate confirmations, and freight invoices store electronically with searchable indexing. This eliminates paper filing systems and enables instant document retrieval for customer inquiries, claims, or audits.
Business intelligence and reporting: Customizable dashboards visualize transportation KPIs including cost per shipment, carrier performance scorecards, lane-level analytics, and budget variance tracking. Integration with Power BI and other analytics platforms enables advanced reporting for executive leadership.
ERP and WMS integration: API connections to enterprise systems automate data flow between order management, inventory systems, and transportation management. When warehouse management systems generate pick tickets, the TMS automatically creates shipment records, eliminating manual data entry.
Strategic Carrier Sourcing and Contracting
Managed transportation service providers handle complex carrier negotiation processes that most shippers lack time and expertise to execute effectively:
Request for proposal (RFP) management: Comprehensive transportation RFPs require analyzing historical shipment data, forecasting future volume by lane, defining service requirements, and presenting this information to qualified carriers in standardized formats enabling apples-to-apples comparison. The process typically spans 8-12 weeks and involves detailed scenario modeling to determine optimal carrier awards.
Contract negotiation and documentation: Beyond base freight rates, carrier contracts require negotiation of fuel surcharges, accessorials, liability, service levels, and payment terms. Managed transportation providers bring market insight from hundreds of annual RFPs, knowing which terms carriers accept and which align with industry standards.
Routing guide development and optimization: After securing carrier contracts, TLI create routing guides uploaded into VioewPoint TMS. These define tender priority by origin-destination lane. Effective guides balance cost and capacity reliability. Typically, 70–80% of volume goes to primary carriers, with 20–30% allocated to backup carriers to maintain competitive pressure. These routing guides balance cost optimization with capacity reliability. Industry research on freight procurement practices shows that successful routing strategies typically assign the majority of lane volume to primary carriers while maintaining backup capacity providers to ensure freight moves even during tight markets.
Continuous rate benchmarking: Transportation markets fluctuate constantly based on capacity conditions, fuel prices, and economic factors. Managed transportation services monitor contract performance quarterly, comparing contracted rates against current market conditions and executing mid-contract renegotiations when significant gaps emerge.
Inbound Freight Management Programs
Many enterprise shippers focus exclusively on outbound freight they control directly while neglecting inbound shipments that vendors manage. However, inbound freight often represents 40-60% of total transportation spend—and presents significant optimization opportunity.
Managed transportation services implement routing guides directing vendors how to ship materials, components, and finished goods to shipper facilities:
Carrier designation: Rather than allowing vendors to select carriers arbitrarily, shippers designate approved carriers offering negotiated rates and service levels. This captures volume discounts that come from consolidating multiple vendors’ shipments with common carriers.
Cost allocation: Vendors initially paying freight costs adjust invoices to bill materials on “freight prepaid” basis, allowing shippers to pay transportation costs directly at lower contracted rates rather than reimbursing vendor markup (which often ranges 15-25% above actual carrier charges).
Compliance enforcement: Vendor portals within the TMS enable suppliers to schedule pickups, print shipping labels, and transmit advance shipment notices electronically. Automated compliance scoring identifies vendors violating routing guide requirements, enabling shippers to address issues systematically.
Inbound freight programs typically reduce total inbound transportation costs by 12-18% while providing visibility that improves inventory planning and production scheduling.
Managed Logistics Services
So consider partnering with TLI for managed logistics, and the first step with TLI will be launching an RFP. Comprehensive transportation RFPs analyze historical shipment data. They forecast future lane volumes. They clearly define service requirements. All information is presented in standardized formats to enable apples-to-apples carrier comparisons. Research provided by Chief Scientists of DAT Freight Chris Caplice working with MIT’s FreightLab indicates the complete RFP process, from data preparation through contract implementation, typically requires 12-23 weeks of dedicated effort (2021, pg. 7).6
So the fundamental value proposition centers on transforming transportation from a tactical cost center into a strategic function. This effort supports broader business objectives. When managed logistics is implemented effectively, it then provides LTL and FTL shipping enterprises with predictable freight spend, the ability to forecast, and have reliable carrier capacity even during market disruptions, and actionable KPI data insights that inform better supply chain decisions.
Footnotes:
- Li, S., Ragu-Nathan, B., Ragu-Nathan, T., & Rao, S.S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34(2), 107-124. ↩︎
- Noman, M., Khattak, A., Shaheen, T., Shafiq, M., Hakeem-Ur-Rehman, Nabi, F.G., & Rehman, M.A. (2023). Impact of supply chain practices on customers’ retention. AIP Conference Proceedings, 2485(1), 130012. https://doi.org/10.1063/5.0105018 ↩︎
- DAT Freight & Analytics historical rate data shows spot market rates during the 2020-2021 capacity crunch exceeded contract rates by significant margins, with dry van spot rates reaching all-time highs before normalizing in 2022-2023. https://www.dat.com/trendlines ↩︎
- U.S. Department of Transportation, Bureau of Transportation Statistics. (2025). Latest Supply Chain and Freight Indicators. Retrieved from https://www.bts.gov/freight-indicators ↩︎
- Caplice, C. (2021). Reducing uncertainty in freight transportation procurement. Journal of Supply Chain Management, Logistics and Procurement, 4(1), 1-18. https://caplice.mit.edu/wp-content/uploads/2021/11/jscm_reducing_uncertainty_in_transportation_procurement_aug_2021.pdf ↩︎
- Caplice, C. (2021). Reducing uncertainty in freight transportation procurement. Journal of Supply Chain Management, Logistics and Procurement, 4(1), 1-18. https://caplice.mit.edu/wp-content/uploads/2021/11/jscm_reducing_uncertainty_in_transportation_procurement_aug_2021.pdf ↩︎
