January 6th, 2025
Key Steps to Create a Successful Freight Analysis Framework
Logistics is a constantly changing, interconnected industry. This provides businesses with an opportunity to move and manage freight shipments more efficiently, but these networks are also intricate and complicated. Finding new ways to drive efficiency, cut costs, and boost revenue takes time and valuable attention.
This is where freight analytics has significant potential for logistics companies. It enables decision-makers to closely scrutinise costs, resilience, and strategy of their operations, through actionable insights afforded by data.
But it takes time and energy to develop a comprehensive, long-term action plan from your shipping analysis. In this article, we’ll discuss how building a solid freight analysis framework can support this process, helping you to understand and optimise your freight operations.
This is where freight analytics has significant potential for logistics companies. It enables decision-makers to closely scrutinise costs, resilience, and strategy of their operations, through actionable insights afforded by data.
But it takes time and energy to develop a comprehensive, long-term action plan from your shipping analysis. In this article, we’ll discuss how building a solid freight analysis framework can support this process, helping you to understand and optimise your freight operations.
What is a freight analysis framework?
Freight analysis looks at different aspects of transportation with a view to enhancing logistics performance overall, but a framework is what enables companies to create their overall strategy.
It gathers data from various sources to evaluate spending and ways to optimise operations, measured against the business’s key performance indicators (KPIs).
In the U.S., the government’s transport department has its own freight analysis framework, or ‘FAF’, which gathers data from various sources to better understand freight movement in different states and metropolitan areas.
This official framework is not used in the UK or Europe, and its scope is far wider—geared towards economic and transportation policy across the country. But transportation companies can still benefit from a framework to analyse what works, what doesn’t, and what could be improved.
It gathers data from various sources to evaluate spending and ways to optimise operations, measured against the business’s key performance indicators (KPIs).
In the U.S., the government’s transport department has its own freight analysis framework, or ‘FAF’, which gathers data from various sources to better understand freight movement in different states and metropolitan areas.
This official framework is not used in the UK or Europe, and its scope is far wider—geared towards economic and transportation policy across the country. But transportation companies can still benefit from a framework to analyse what works, what doesn’t, and what could be improved.
What’s involved in freight analysis?
With a structured approach to your freight company’s data, you can find actionable insights into how your transport operations are working. But that’s only one part of the process: you’ll have to assess cost, route efficiency, supply chain partners, and more.
Reliable data
The cornerstone of your analysis is reliable, consistent data, and that means gathering all the information you have for each aspect of the business. The warehousing and packaging costs, idle time for each trip, manifests, GPS tracking—each of these will be invaluable to working out where to drive efficiency, cut spending, and boost performance.
Cost analysis
You may have specific areas of concern over whether operational costs could be optimised. A freight spend or ‘freight cost analysis’ should give you clarity here. For example, analysing invoices, reports, contracts and real-time data can identify any discrepancies and identify where you can make savings. With sufficient data, this can help you stabilise your spending.
Route optimisation
Whether you’re managing road, rail, or sea freight, making sure A gets to B as efficiently as possible is the aim of strong logistics management. Part of your analysis should therefore focus on which are the most optimal routes for your transportation—whether that’s in terms of transit times, cost, or security.
Performance metrics
Your metrics or KPIs give you an idea of how your business is performing against your own set objectives and standards. This could be the rate of on-time deliveries, your fuel efficiency, carbon emissions, or how well warehouse space is being utilised.
Through effective use of KPIs you can not only identify points of delay or congestion (aka bottlenecks) across your logistics network, but you can also create a reference point for operational efficiency to help you to continuously improve.
Through effective use of KPIs you can not only identify points of delay or congestion (aka bottlenecks) across your logistics network, but you can also create a reference point for operational efficiency to help you to continuously improve.
Tips for a successful freight analysis framework
1. Define your objectives
You could be driving efficiency, on a cost-cutting exercise, looking to speed up deliveries, or indeed all three. The objectives of your analysis will give your framework a sense of direction, for which you can ensure every action you take is aligned to your overarching operations goals.
2. Understand analytics tools available
There are four different types of analytics: predictive, descriptive, diagnostic and prescriptive. Knowing how to apply them will help you analyse logistics performance with precision.
- Predictive analytics makes use of machine learning and can help you forecast future outcomes based on your data—such as seasonal demand changes for more efficient inventory management
- Prescriptive analytics develops on the scenarios produced by predictive analytics, and recommends different steps to take. For example, identifying the best routes to take in the event of disruption or a sudden spike in the price of fuel
- Descriptive analytics takes your company’s historical data to analyse your past performance, e.g. on-time delivery rates over the previous 12 months
- Diagnostic analytics uses your data to understand what is causing specific outcomes like late deliveries, empty miles, or higher transport costs. If your company is experiencing a lot of idle time on specific routes, it can help to assess whether this is because of those areas or if it is the result of inefficient load planning, poor forecasting, or other factors entirely
- 3. Evaluate against market trends
- Freight market analysis should account for what’s going on in the wider industry. Fuel prices are a commonly used benchmark, but new tech developments and other factors influencing market dynamics like port closures or geopolitical disruptions are key to making forecasts and more informed decisions.
- 4. ReportTo show your company’s stakeholders, employees, and others the value of your analysis, it’s important to produce a regular freight analysis report. This will help you to keep an eye on the state of your inventory management, resource allocation, and route performance, but also to communicate your progress or any issues identified to the people involved in your organisation. That way, everyone can stay aligned with the wider logistics strategy.Drive efficiency across your logistics with Amazon Freight
Our mission is to support shippers deliver excellent customer service with timely and efficient logistics solutions. To do this, we’re regularly looking at ways to optimise operations, especially through the power of data.
From machine learning capabilities, GPS tracking and route optimisation, we take strong measures to create accurate forecasts that can help our customers deliver results in real-time and respond to disruptions.
Get in touch today at freight-uk-interest@amazon.com to find out more about how we can help. Or, simply get started by creating your free shipper account and receive an instant quote.
From machine learning capabilities, GPS tracking and route optimisation, we take strong measures to create accurate forecasts that can help our customers deliver results in real-time and respond to disruptions.
Get in touch today at freight-uk-interest@amazon.com to find out more about how we can help. Or, simply get started by creating your free shipper account and receive an instant quote.
Amazon Freight uses cookies to enhance your experience and help us understand how you use our website. Because we respect your right to privacy, you can choose what types of cookies you allow. Click Accept All to allow all cookies or open Cookie Settings to set your preferences.