A number of manufacturing, wholesale and distribution companies pay too much for their 
inbound shipments. The additional costs are hidden in the price of the goods being shipped. Hidden costs of inbound freight get buried in vendor invoices. What’s more, these overcharges in freight often go unnoticed. It is important to efficiently manage inbound logistics with the help of some objective measurements.
Companies make a big mistake when they allow their suppliers to take control of their spending for freight. That’s because when a supplier selects and pays for inbound freight, transportation costs are hidden from the purchasing department. The costs of transportation are often embedded in the cost of the product. Also, shipment that comes as vendor prepaid freight is not free. There is, in fact, a huge savings opportunity in inbound transportation.
Manufacturers often find it difficult to manage inbound logistics as they rely heavily on their suppliers. Plus, they hesitate in making demands or asking too many questions from the supplier for fear of spoiling their relationship. Likewise, suppliers are not willing to share information about their production schedules and shipping plans. As a result, cost and service is impacted, that further leads to inefficiency and higher costs.
To cut down on costs associated with inbound transportation, manufacturers must first understand inbound freight flows. Gather information about shipment volumes, lane rates, consistency in frequency or schedule, vendor locations, products received, and modes and carriers being used. The objective is to determine the actual cost of your inbound freight. In case the freight cost is embedded in product cost, ask the vendor to show it separately. This data can help determine the value of transportation savings if you gain control of inbound freight expenses. You may also seek the help of a third party who can work on your behalf to determine freight costs.
