The shift in order optimization has become a key strategy for shippers in recent years. Shippers have traditionally rushed to get orders out the door quickly to meet consumer demands, but this approach has proven to be costly. Echo Global Logistics’ Executive Vice President of Managed Transportation, Mike Mobley, highlights the inefficiency of this one-to-one order to shipment scenario.
By allowing for one or two days between receiving an order and shipping it out, shippers can unlock significant cost savings. This strategic approach enables shippers and their logistics partners to assess orders collectively and find more cost-effective ways to move them. This not only benefits shippers in terms of reduced costs but also translates into lower prices for consumers.
Implementing order optimization processes in collaboration with Echo can result in a 10%-15% cost reduction for most shippers. The more orders a shipper has, the greater the opportunities for saving money. For instance, Echo works with a company that sends order data for multiple distribution centers daily, providing an optimized load plan that reduces costs within hours.
Shippers transitioning from prioritizing speed to efficiency must communicate these changes to their customers. Managing customer expectations by explaining the order optimization process allows shippers to emphasize the benefits of more efficient supply chains for everyone involved.
Aside from cost savings, order optimization also contributes to reducing the overall miles traveled for freight deliveries, benefiting the environment and appealing to environmentally conscious consumers. The positive impacts of order optimization justify the time invested in formulating and executing a load plan, benefiting every member of the supply chain.
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