Freight Spend Analysis

Data Collection and Invoice Normalization

The foundation of freight spend analysis involves gathering transportation invoices generated over a defined period, such as the previous month or quarter. OGL supports this process by compiling records from various carriers and logistics providers into a centralized repository. Because freight invoices often arrive in different formats with varying levels of detail, the data must be normalized before it can be effectively reviewed. We coordinate the extraction and standardization of key data points, such as origin, destination, weight, freight class, and total charges.

This normalization process allows shippers to compare costs across different providers and transportation modes on a consistent basis. By establishing a structured dataset, supply chain professionals can generate reports that align with their internal key performance indicators. This organized historical data serves as a baseline for evaluating current freight operations and identifying areas where transportation expenditures are concentrated. Without this structured approach, evaluating the true cost of shipping across a diverse network remains challenging.

Categorization by Lane, Mode, and Provider

Once the invoice data is collected and normalized, it is categorized to provide a clearer picture of shipping activities. OGL assists in segmenting the data by specific shipping lanes, transportation modes (such as less-than-truckload, full truckload, or ocean freight), and individual carriers. This detailed breakdown helps shippers identify which routes and providers account for the largest portion of their freight spend, providing a granular view of their logistics network.

Reviewing expenditures by category allows supply chain managers to see patterns in their shipping history. For example, a shipper might discover that a significant volume of freight is moving on a particular lane using a premium service level when a standard service might suffice. By providing this categorized visibility, OGL empowers shippers to make data-driven decisions regarding their transportation network and carrier selection. This level of insight is particularly useful when preparing for seasonal volume shifts or adjusting distribution strategies.

Visibility into Accessorial Charges and Exceptions

A critical component of freight spend analysis is identifying costs that fall outside of standard line-haul rates. Accessorial charges—such as liftgate fees, residential delivery surcharges, detention, and reweighs—can significantly impact the total cost of transportation. OGL helps shippers isolate these additional fees within their invoice data to understand how frequently they occur and which carriers or locations are associated with them. This visibility is essential for understanding the full financial impact of each shipment.

In addition to accessorials, the analysis process highlights billing exceptions and discrepancies between quoted rates and final invoiced amounts. By bringing attention to these variations, shippers can investigate the underlying causes, whether they stem from inaccurate freight classification, incorrect weight declarations, or unexpected delays at the delivery site. This level of detail supports more accurate forecasting for future shipments and helps teams address recurring issues in their shipping processes.

Decision Support for Supply Chain Planning

The insights gained from freight spend analysis are intended to support broader supply chain planning and strategy. OGL provides the structured data and custom reports that supply chain professionals need to present findings to their internal teams. By clarifying historical shipping data, shippers can develop a more informed approach to their transportation operations, aligning their logistics activities with broader organizational goals.

While freight costs naturally fluctuate due to market conditions and seasonal demand, establishing a clear understanding of past expenditures helps mitigate uncertainty. Shippers can use the analysis to compare their historical costs against current market rates or to evaluate the potential impact of shifting freight volumes between different modes or providers. This information is valuable for those looking to refine their project supply chain strategies or adjust how we deliver their goods across different regions.

Freight Spend Analysis Components

A comprehensive review of transportation costs involves examining several specific elements of the shipping process. OGL coordinates the evaluation of these factors to provide a detailed overview of freight expenditures so the agreed data fields can be considered in the analysis.

Key Data Points Reviewed

• Total freight charges categorized by individual carrier and transportation mode
• Volume and frequency of shipments moving on specific origin-destination lanes
• Frequency and total cost of accessorial charges, such as detention or liftgate fees
• Discrepancies identified between initial rate quotes and final invoiced amounts
• Distribution of shipments across different National Motor Freight Classification (NMFC) classes
• Seasonal fluctuations and patterns in transportation expenditures over time
• Historical cost trends evaluated over defined reporting periods