Free Donuts or Freight Cost Savings?

November 5 was one of several annually-observed “Free Donut Days”. Did you get your free beignet, cruller or zeppole? Everyone likes free stuff; especially freight carriers who haul for organizations without TMS and the rules-based tendering such software delivers. Here’s a donut-themed tale underscoring one of the many risks a shipper faces if they resist using a TMS for better visibility and cost control over transportation spend.


It’s a simple tale really. Chris, a transportation manager for a large volume shipper – we’ll call the shipper “Lorem Industries” – had strong feelings for a particular carrier called “Doughboy National Freightlines”. Wherever possible, particularly when expedited shipping was required, Chris tendered the offer to Doughboy National. It wasn’t because Doughboy had the lowest rate. Rather, it was because every week, the Doughboy National rep would stop by the Lorem Industries transportation department bearing boxes of warm donuts for all the dispatchers, traffic managers, etc.

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Putting a TMS system in place and codifying the business requirements into standardized business processes, automated and enforced by technology, takes the autonomy out of important business decisions and ensures the optimal decisions are made consistently.

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You see where this is heading don’t you? Whether it were donuts, sports tickets, hats & T-shirts or any other type of interesting swag, carrier selection and tendering decisions based on anything other than business rules is a recipe for poor cost performance and, for high volume shippers, can add hundreds of thousands of dollars to their annual freight spend; monies that could add to bottom line profits. When you leave decisions like this (and many other critical logistics decisions) to systems built atop tribal knowledge and inconsistent, home-brewed processes, you’re invariably leaving money on the table.

Putting a TMS system in place and codifying the business requirements into standardized business processes, automated and enforced by technology, takes the autonomy out of important business decisions and ensures the optimal decisions are made consistently.

Without TMS, a shipper cannot enforce rates, routing guide compliance and a host of other metrics critical to efficient transportation planning and spend. With a TMS, shippers can expect to capture as much as 10% savings on their transportation spend via increased use of preferred carriers, lower cost mode selection and better procurement negotiations according to an ARC Research-produced, “Transportation Management Systems Global Market Research Study” details of which are explored in the “Calculating Savings and Return for an Enterprise Transportation Optimization and Automation Solution” white paper.

The cost of not using a TMS system and leaving important choices to be influenced by anything or anyone other than your business rules far outweighs the cost of buying donuts once a week for your transportation department employees. So to recap in brief:

  • TMS solutions are crucial to successful, cost-effective transportation planning and management
  • Everyone loves donuts

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