DTA - Freight Analysis

Subaru Canada

In 1996, Subaru Canada was faced with a major challenge. Practically overnight, Subaru's main less-than-truckload (LTL) carrier went out of business. But thanks to the quick reaction from DTA Services Limited, Subaru's daily parts deliveries to dealers across Canada didn't miss a beat. "DTA stepped in immediately," says Don Calder, Subaru's national parts manager in Mississauga, ON, "to recommend various regional carriers to replace the national coverage we had received from Interlink Freight Systems."

That first year, DTA also delivered to Subaru a one-time, 18 percent saving on inbound shipment expenses. "Many of the invoices were marked" prepaid by customer', says Calder, "so shippers, including our own US manufacturing facilities, sent goods with their usual carriers. They then charged us the full rate. DTA suggested negotiating with other carriers for lower rates." On its outbound shipments, Subaru also saw its overall freight bill drop by eight percent. One source of the savings has been DTA's rewording of contracts, which has resulted in lower estimated rates applied to shipments between two points, in either direction.

"DTA matches us with suitable carriers," says Calder, "based on a rate/service scale. But the service level is the key. If our standard is four-day delivery to Vancouver, we want to find a reliable shipper that can meet it as the lowest rate."

DTA essentially serves as Subaru's logistics outsourcing partner and Subaru's big focus is meeting customer needs. Distribution isn't a core competency, and in the hands of DTA, it helps achieve Subaru's objective of shipping parts to dealers to keep its vehicles on the road. "They're our traffic and transportation department," he says. "I'm just a one-man band here. They have the expertise and industry contracts. As a result, I only have to spend about 15 minutes a month worrying about transportation...They make my job easier."

DTA's job of auditing freight bills pays off in many ways as there are carrier errors of various sorts. In most companies, unless they have experienced in-house staff to comb through the bills, the accounts payable department usually pays them upon submission, increasing the risk of duplicates.

In addition, DTA monitors Subaru's shipments by destination, using a benchmarking model. If the cost exceeds the experience of its other clients shipping in that lane, DTA issues an alert to Subaru. According to Calder, such attention to detail keeps carriers on their toes. "Since they know that DTA will turn back any incorrect invoices," says Calder, "they try harder to get it right the first time."

"It's been a true partnership," says Calder. "In the future, we look forward to working with them more closely."