Reducing transport costs

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According to a study[1] by Beth Enslow of Aberdeen Group, a research institute, 8% of financial costs in the logistics chain could be avoided with better management of transport invoice control. Delocalisation to low-cost countries and the resulting extended logistics chain have made transport invoices more difficult to track and to verify. The ‘Finance’ module of DDS Shipper, the TMS (Transport Management System) suite published by DDS Logistics, helps users see through the complexity.

Delocalisation, longer logistics chains, increasingly intermodal transport, rising oil prices … Over the last few years, several factors have come together to make transport operations more complex and expensive. A TMS can provide a partial solution through improved monitoring and control of transport billing. The TMS software suite from DDS Logistics, DDS Shipper, includes a ‘Finance’ module capable of helping users manage complex financial transfers at international level — and reducing their transport costs. How does it work?

Sorting through transport rates

Partly by generating cost simulations in advance. Rates negotiated with shippers or standard internal company transport costs are first entered into the software. It is then an easy matter to simulate the costs for a given operation and compare the offers of different shippers. The module is a genuine decision support tool that can also give advance notice of cash-flow needs. Another advantage is in pre-billing. The document is automatically reconciled with the invoice issued by the service provider. The process can highlight any differences and the financial commitments corresponding to the invoices received, issue payment orders and prepare for recording the supplier’s invoice in the accounts. Accounting statistics can also be printed out. Concerning international payments, the module automates the payment of letters of credit and triggers bank transfers.

As Jérôme Bour, CEO of DDS Logistics points out, “Using the Finance module can reduce transport costs significantly, particularly by comparing the rates of different service providers and reducing administrative costs by automating certain tasks.” NEXANS is an example of the savings that can be made by using the Finance module.

The worldwide leader in the cable industry has registered savings of 10,000 to 20,000 euros a month since installing DDS Shipper, thanks to invoicing adjustments.More generally, the other functions of the TMS suite have helped reduce the manufacturer’s overall logistics costs by 7%. Particular gains for NEXANS include optimised transport rates, monitoring the quality of transport service providers, and dynamically-updated delivery schedules.

Savings from grouped orders, optimised transport circuits … thanks to the TMS suite

ArcelorMittal Stainless Precision Europe (a stainless steel strip metal producer belonging to the Arcelor Mittal Group) has adopted DDS Shipper as a part of its Log 4 All project. It is already saving 4% on transport costs and 24 hours on shipping, delivery and billing times at its Gueugnon site, particularly by optimising the grouping of merchandise. Manitou, the world leader in rough-terrain handling equipment, estimates that it saves 10% on transport costs by grouping deliveries along a given transport corridor and monitoring the costs and services of its transport providers.“Taken all together, the various functions of DDS Shipper provide opportunities for considerable savings, with a very rapid return on investment, which for some companies is only a matter of months”, concludes Jérôme Bour.

[1] Study carried out in 2007 involving 380 multinationals from the Fortune 500 list(source : www.martimejournal.com, 01 august 2007)