Simplified Pricing Model Improves Efficiency and Cuts Costs – Celadon Logistics
When a customer needed help with an inefficient consolidation process, Celadon Logistics created a solution.
A top tier Celadon customer has five geographically-dispersed plants in Mexico that were supplied from the United States using an inefficient consolidation process and a resulting rate structure that was not cost effective. This price structure penalized the customer during weeks when the volumes would drop as pricing was predicated on the volume across all suppliers. The overall effectiveness of the supply chain was hampered by the duplicity of efforts throughout the entire system.
Celadon Logistics was able to establish a simplified pricing model from supplier to final destination as well as a control tower approach to improve efficiency. The pricing structure was transparent, easy to understand and did not penalize if volumes fluctuated in any given week. Additionally, it offered the same pricing structure to all five plants in Mexico as a single solution, leveraging all shipping volumes.
Celadon was able to consolidate loads from multiple suppliers at various consolidation centers to build full truckloads from northern facilities and deliver directly to the customs broker. Not only does this reduce handling, improve transit times, and provide consistent deliveries before noon, but it also creates cost savings at the broker as they are only processing one delivery versus multiple throughout a given day.
Celadon accomplishes this using an innovative “control tower” approach. When a control tower exists, the available capacity is identified and the under-utilized truckload can have additional freight added to fill out the load. As a result, costs are reduced.
To learn more about Celadon Logistics’ solutions, call 866-225-0073 or visit www.celadonlogistics.com.