BY JAMES A. COOKE, EDITOR AT LARGE
FREIGHT RATE FORECASTING
technologyreview
How Invacare
slashed its
freight spend
SHIPPERS WHO RELY ON TRUCKING SERVICE
don’t have it easy these days. Truck rates keep going
up, and haulers seem to have the upper hand when
it comes to pricing.
But that’s not to say they’re completely without
options. In many cases, there are still a few things
shippers can do to hold down costs. For instance,
one is to figure out on which lanes a carrier wants
or needs business and then leverage that information during contract negotiations.
It’s a simple concept, but one that’s tough to execute, largely because of the amount of work
involved. Generally speaking, it requires the shipper to comb through multiple freight tariffs to find
the lowest rates on individual lanes.
Matt Knittle, director of corporate logistics at
Invacare Corp., however, found a shortcut. Rather
than pore through the tariffs manually, he used
software to conduct a freight rate analysis with an
eye toward determining which shipping lanes
offered some negotiating leverage. He then used
that information in his contract talks with trucking
Prior to starting LTL contract talks,
home healthcare products maker
Invacare did a detailed lane-by-
lane analysis of its carriers’
tariffs. The result: big savings.
companies. The result was over a million dollars in
savings with no degradation in service.
“I used this tool to get negotiating power with
the carriers,” says Knittle.
RUNNING OUT OF OPTIONS
Based in Elyria, Ohio, Invacare makes wheelchairs,
bariatric equipment, disability scooters, respiratory
products, and other homecare items. Last year, it
generated $1.8 billion in revenues from business in
82 countries. The company, which has manufacturing plants in Florida and Ohio as well as in China
and Mexico, operates a network of 10 distribution
centers to supply its customer base of medical
equipment providers.
What prompted Knittle to begin scrutinizing
freight tariffs last year was intensifying rate pressure that threatened to wreak havoc on Invacare’s
shipping budget. Up to that point, the company
had enjoyed reasonable success in managing its
shipping costs. Over a five-year period, it had pared
its ranks of less-than-truckload (LTL) carriers from
