Transportation and logistics are critical for manufacturers. And they are often among the largest and most volatile expenses. Rising freight rates, fragmented carrier networks, and inconsistent routing practices can quickly erode margins and service reliability. To stay competitive, companies need visibility into their transportation expenses and a disciplined approach to sourcing and carrier management.
One leading manufacturer faced these very challenges. With tens of millions of dollars in annual transportation costs and a complex network of carriers and routes, the company saw an opportunity to better manage costs, improve service, and reduce operational complexity.
The manufacturer’s annual transportation outlay exceeded $37 million, with 80 percent concentrated among a limited number of carriers and shipping lanes. Yet it lacked a strategic sourcing framework and better visibility to uncover cost-saving opportunities.
Carrier use was fragmented, routing practices were inconsistent, and dispatchers prioritized moving loads quickly over tracking data and performance. Without historical data on shipping patterns and on-time deliveries, the company had little leverage to negotiate pricing. For example, it sent hundreds of shipments to the same places each month, but the business wasn’t leveraging that volume to secure better rates.
Compounding the situation was the company’s internal fleet: the number of trucks was more than 30 percent higher than the number of drivers. This added costs to maintenance, licensing, and insurance.
Altogether, these issues inflated transportation expenses, strained resources, and undermined service reliability.
Integrated Project Management Company, Inc. (IPM) assessed the company’s transportation practices to identify ways to reduce costs and improve processes.
The effort began with thorough data collection and analysis to establish a reliable cost baseline. From there, IPM prioritized opportunities by analyzing carrier costs and benchmarking the most common shipping routes.
Analysis found that while about 25 carriers accounted for 80 percent of costs, the company could shift more business toward even fewer carriers to leverage volume. Using tools like carrier scorecards, service level agreements, and a quarterly review process would improve performance. Because the top 20 shipping lanes made up more than half of shipments, IPM developed a corporate routing guide to enforce consistency, improve on-time performance, and ensure cost-effective practices across the logistics team.
This structured approach gave the company clear insight into where consolidation, governance, and fleet optimization could deliver significant benefits.
IPM’s analysis identified $3.5 million in potential annual savings. Opportunities included consolidating carriers to strengthen negotiating leverage, optimizing high-volume lanes, and reducing underutilized fleet assets.
Beyond the financial savings, the company gained a sustainable sourcing and governance framework that could support better carrier relationships and service reliability.
With clearer visibility into its logistics network, the company can treat transportation as a strategic capability rather than simply an expense.
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