Companies can use data analytics to inform transportation strategy

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Decisions in transportation strategy are complex. Balancing customer needs for near-immediate deliveries against shipping costs requires careful planning to execute flawlessly. 

As organizations plan to meet the demands of today’s consumers, thought to the underlying data used to inform, analyze and act must be undertaken to succeed. Those who execute well, gain competitive advantage. Those who do not, typically join the list of failures. There are several sources of shipping data readily available to drive transportation strategy decisions. Leveraging this data is key to identifying supply chain transportation opportunities.

The transportation industry is rich with data points, and figuring out which ones to zoom in on is vital for a company’s successful deployment of its supply chain transportation strategy. Companies can gather important data from baseline rate agreements: inbound, outbound, vendor and third-party origin shipping transactions and carrier status and invoice data. External tools such as address validation or carrier time in transit APIs can further enrich data and analysis.

“Organizations with strong transportation strategy execution know that processes to identify areas of supply chain improvement are continual,” according to Logistyx Technologies Vice President of Business Intelligence Mike Eisner. “They design data models in a way to allow for flexible analysis with multiple views and perspectives to gain valuable insights.”


“Visualization tools are critical to interpret the data. These visualization insights help inform and support transportation-related decisions to meet organizational goals and objectives. Good data analytics and visualization methods reflect a process. As customer expectations and transportation options evolve over time, so too must the tools used to formulate strategic changes to meet these challenges,” adds Eisner.

Logistyx Technologies provides cloud-based transportation management execution solutions into many of the world’s leading organizations. Logistyx enables its execution platform with global carrier network integrations, visibility solutions, invoice audit and business intelligence and data analytics. Logistyx’s solutions support its clients’ transportation strategy execution with tools to minimize transportation spend, ensure client delivery expectations, improve on time delivery, pay carrier vendors with confidence and arm them with strong BI and data analytical insights.

“From the raw data itself, data representations can take many forms, including key performance indicator (KPI) calculations, heat maps, charts, timelines or even filtered raw data,” Eisner says. “You need to plan to be able to leverage filter options within visualization tools to get at the information you require.”

When working to uncover opportunities to reduce transportation spend within your transportation strategy, organizations can begin by looking to the following: 


  • Contract negotiation or optimization. Organizations can begin with understanding historical shipping data characteristics and layer in invoicing data. Next they need to predict pattern changes to their shipping profiles in the upcoming year (contractual term). Alignment of where they have been against where they are trending will assist in uncovering areas of focus requirements within contract negotiations. Trends toward local, low weight and residential shipments will require a different negotiation approach than higher zone or heavy weight transactions requiring expedited services. If the trend is toward localized lower weight shipments, an easy exercise is to understand how the company’s minimum revenue per package aligns against zone-based discounting to uncover at what point the company’s discounts apply compared with the minimum. The results would validate whether this is an area to address. Visualization tools can illustrate quantitative impacts across weight breaks, carrier service and zone.
  • Carrier performance and benchmarking. Carrier score carding is important to understand how your vendors are performing against the competition and your expectations. Shipment status data and invoice data accuracy assist in this exercise. Analysis could be undertaken to understand cost and service impacts of expedited versus standard carrier service options. Data visualization of the patterns when expedited higher cost options have little or no effect on delivery versus standard options can be revealed and savings quantified. Further, cost simulation and delivery performance benchmarking with drop ship analysis, distribution center placement, alternative origin fulfillment and omni channel expansion analysis in retail environments all are critical to success in retail to consumer expansion projects and understanding transportation cost impacts amongst organizational options, according to Eisner.
  • Carrier invoice audit and claims management. Unfortunately, carriers make invoicing errors. There is a reason an industry of organizations exists to correct these problems. If internally managed, a company requires tools to identify and recover incorrect billings utilizing invoice, status and contractual data. Critical within this analysis is a process to manage invoice refund and claim management. Visibility and billing data can identify and quantify refunds such as lost, damaged, late duplicate and manifested not shipped errors quite easily.

While some companies choose to obtain transportation data to perform BI visualizations and analytics with an in-house team, others partner with third-party vendors to harness their experience, flexibility, pre-built data connections and tools converting data into valuable insights for strategic decision making.

“When partnering with a third-party vendor, you are leveraging their expertise and experience. There are many options available and simple research can uncover their areas of expertise,” Eisner says. “No matter how companies choose to leverage their data, one thing is clear: In today’s hyper-competitive environment, they cannot afford to let it sit unmined, while their competition takes action.”

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