Harald Zoller, CEO of the Zoller Consulting Consulting GmbH, is in charge of the complete logistics business of a renowned german furniture producer. His scope includes intralogistics as well as traditional logistics. Zoller uses IMPARGOs CargoApps for route optimization and the creation of cost transparency to identify cost saving potential while protecting his contractors from going insolvent.

The lack of cost transparency can quickly lead to insolvency

“Many of our transport service providers, especially small and medium sized companies, as well as newbies lack control of their cost calculation. That's why they frequently decide from their gut feeling”, explains Zoller. In conjunction with the low profit margins in the transportation sector, already marginal deviations in cost “may turn an presumably profitable tour into a net loss.”

“From a Shippers point of view we show a great interest to save our transport service providers cost as well as our own”, says Zoller. A basic prerequisite for this is a higher level of transparency about the main cost drivers. But he also stresses the fact that “it’s not sufficient to score good prices on the market in a short-term setting, that may not be stable in the long run.” It is also important to protect the service provider from insolvency due to the lack of cost control, which would in turn lead to the lack of freight space for the shipping company.

Using the IMPARGOs CargoApps in contract negotiations

Along with the desire for increased cost transparency of his transportation service providers, today every tour is pre-calculated with the CargoApps prior to the contract negotiations. After the tour another calculation is with the up-to-date toll data and fuel cost is performed. “We receive the optimal transport costs with IMPARGO, without endangering our service providers”, explains Zoller. “The combination of vehicle cost calculation and truck route planning with IMPARGO enables us to precisely determine the transport costs with up-to-date data like toll and fuel prices”. During the negotiations this enables us to optimize transportation costs without putting too much strain on our service providers.

“Cost transparency is the foundation of uncovering saving potentials”

“The truck toll as a cost factor is gaining importance, because it uses up more and more share in the overall transportation cost”, Zoller says. But it is also a cost factor that can only be influenced by the transportation service provider himself through a fitting route guidance. This is why it is even more important to identify the cost factors that can be influenced, forecast future implications of toll and fuel price changes, as well as performing scenario analyses. According to Zoller, this is only achievable with complete cost transparency. “IMPARGO helps us to get a clear understanding of our tour-specific cost and therefore uncover cost saving potentials”, explains Zoller.