“Savings” That Never Really Delivered
Back in the day, we were managing truckload freight for a large industrial company. The setup was solid—good rates, consistent service, everything working as it should.
Then along comes one of their internal guys—let’s call him Brent—who wanted to prove he could wring even more “efficiency” out of the operation. Without involving us, he went out and re-bid ten of their biggest lanes on his own. Soon after, he announced with great fanfare that he had found $800,000 in annual savings.
He got a big award. Some kind of internal hero. Made us look kind of bad (why couldn’t LP have done that) but we had to keep our heads down. Didn’t want to get in front of this news cannon.
But nobody looked too closely at the numbers. They just heard the word “savings” and they all nodded approvingly. GOOD NEWS!
Eventually, I asked to see the actual data. Took some persistence, but I got it. And what it showed was that nine of the ten lanes were actually higher—by a combined $200,000 a year. The entire “savings” was based on just one lane, which supposedly saved a million dollars.
Now, you’d think someone of the big execs would stop and ask, “Wait—a million-dollar savings on a single truck lane?” But no one did.
That lane? A short 150-mile “mini” route on paper. But the freight was a huge, oversized part—over-width, requiring flatbeds, special routing, permits, no night driving, no driving in the rain or snow and no weekend runs. Oh—and customs clearance on both sides of a very congested, slow-moving international bridge thrown in for good measure.
The winning bidder came in at half the price of every other quote—$1,000 below the next-lowest. A number that only made sense if you had no idea what the freight actually was. But hey: $1,000 of savings per load x 1,000 loads a year = $1 million in “savings.” Woo hoo, right?
Only problem? Once they realized what they’d signed up for, that company just disappeared. Never moved a single load. Never heard from them again.
But those “savings” stayed on the books. The award stayed on Brent’s shelf. And the myth of the great cost-cutter lived on.
Moral of the story?
It’s easy to find “waste” when you don’t understand the work.
And even easier to declare victory—and then quietly slip away—when no one notices that none of those trucks actually rolled.
