Smarter Shipping, Volume 12: As Q1 Results Roll In, a Grim Picture Takes Form in the Transportation Industry
Welcome to Volume 12 of "Smarter Shipping" with Intelligent Audit.
If you missed last week's newsletter, "Smarter Shipping, Volume 11: Tough Times for Tomé as UPS Flounders in Q1, Teamster Strike, & FedEx's Bold Move."
Let's dive right in!
In this edition of "Smarter Shipping," we'll cover the following:
- Customer Story: Anomaly Detection Uncovers Hidden 250% Spike in Shipping Costs
- A Curation of the top 14 stories around the industry to know
- The latest insights from the Intelligent Audit Resource Hub
- David Wedekind of Intelligent Audit drops a video on "Reasons to Outsource Your Freight Audit and Payment Process"
Customer Story: Anomaly Detection Uncovers Hidden 250% Spike in Shipping Costs
Our global retail customer launched an e-commerce initiative for a newly acquired line of business. They had no idea the packaging they were using for a handful of their SKUs exceeded the large package and additional handling dimensions. The customer expected the launch to be a significant revenue generator, but unfortunately, the additional fees were causing these to be a cost center.
As Q1 Results Roll In, a Grim Picture Takes Form in the Transportation Industry
So far, 2023 has been anything but easy for the transportation industry. As earnings calls and quarterly reports roll in, it’s clear that low volumes are continuing to tank revenues and force industry leaders to make tough decisions. The news is bleak across the industry, from falling revenues to fleet counts. But it’s not all tanking revenues and plummeting volumes: DHL’s new emissions tool promises to help shippers improve sustainability, and Outrider is making headlines with new tracking technologies after a jaw-dropping fundraising session earlier this year. In an industry that’s always moving, here are the 14 headlines you need to know.
As Fears of Strike Persist, UPS Sends Executives to Top Customers
With fears of a strike of UPS’ 350,000 Teamsters continuing to send shivers down the backs of transportation professionals, UPS CEO Carol Tomé is growing increasingly desperate to convince top customers not to shift volumes to other carriers, despite what the headlines may say.
“We’ve assigned 127 high-impact executives to over 380 customers representing about one-third of our total volume,” Tomé said during an April 25 earnings call. “The role of the high-impact executive is to meet with our customers, update them on our ongoing negotiations with the Teamsters, and keep them with us.”
During that same call, UPS discussed its Q1 2023 results, which, while better than some industry experts predicted given the difficult freight volume landscape, still reflected a significant revenue loss for the parcel giant. Here are a few highlights:
- Consolidated Revenue of $22.9B
- Consolidated Operating Profit of $2.5B
- Consolidated Operating Margin of 11.1%
“In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia. ... We will remain focused on driving productivity while investing in efficiency and growth initiatives, enabling us to come out of this demand cycle even stronger,” Tomé said.
Facing Falling Demand, Amazon Plans to Slow Capital Investments
After significant pandemic-era investments in expanding its fulfillment network, e-commerce giant Amazon plans to slow capital investments and refocus on lowering operational spend. Amazon aims to refocus on bolstering efficiency throughout its regional fulfillment operations to combat plummeting demand and a harsh inflationary environment.
It’s Time for the Supply Chain to Go ‘Back to Basics,’ Industry Expert Says
Following a tumultuous few years, some transportation industry experts contend that supply chain professionals need to simplify to amplify. “Going ‘back to basics’ doesn’t mean ditching the newer technologies that streamline procurement processes and allow industry players to make good analytical decisions,” contributor Rich Weissman wrote in a column for Supply Chain Dive., “Instead, I’m talking about embracing the foundational building blocks of procurement and supply chain management, especially in an increasingly volatile economy.”
Key Benchmarks Reveal Tough Times at C.H. Robinson
For C.H. Robinson, Q1 2023 brought bad news: falling volumes led to significant losses at the brokerage. This shift can be clearly seen in some of the company’s key benchmarks:
- Gross Profits fell 24.7%
- Income from Operations fell 53.4%
- Diluted Earnings per Share fell 53.2%
- Adjusted EPS fell 52.2%
“Our Q1 financial results reflect the softening market conditions that have transpired in the freight transportation market over the past 12 months,” interim CEO Scott Anderson in an April 26 earnings call, “With shippers continuing to manage through elevated inventories amid slowing economic growth, the balance of supply and demand has shifted from a tight market a year ago to one that is now oversupplied.”
Insights from the Intelligent Audit Resource Hub
8 Reasons Today’s Shippers Need Reliable Freight Audit and Payment Services
The surge of e-commerce has made managing the sheer volume of invoices manually impossible. Manual invoice management wastes precious time, hampers business growth, and creates more work for your business by researching and reconciling discrepancies. And those are just the ones you know about! Shippers must focus on uncovering inefficiencies, eliminating waste, and having a ‘continuous improvement’ mindset to remain competitive in the logistics market.
Thankfully, freight audit and payment software solutions are available to automate the identification of issues, submission of claims, and recovery in key areas such as rate variance, accessorial charges, fees, waivers, and duplicate invoices. In this article, we'll delve into eight reasons why shippers need a reliable freight audit company and payment services provider to optimize their business and how Intelligent Audit's Freight Auditing services are a must-have for effective freight audit and payment best practices.
Maximizing Operational Efficiency With Supply Chain Business Intelligence
Managing the continuous balancing act between cost pressures, demand fluctuations, regulatory shifts, and capitalizing on growth and innovation opportunities is a challenging feat for businesses.
With supply chain management playing a pivotal role in this context, business intelligence is a transformative tool enabling organizations to make data-driven decisions and successfully play that balancing act while achieving operational efficiency.
Read on to learn more about the benefits of integrating business intelligence into supply chain management. Discover how to optimize operations, enhance positioning, and elevate logistics performance in a complex and evolving post-pandemic business climate.
Reasons to Outsource Your Freight Audit and Payment Process
Hear from David Wedekind at IA!
Are you considering finding help with your freight audit and payment needs? Do you need a reminder of the many ways partnering with IA can help your business? In this video, David shares the top reasons why outsourcing your freight audit and payment needs is a great idea!
That's it for this edition of "Smarter Shipping" with Intelligent Audit! Make sure to subscribe to not miss a weekly edition!
Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
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