Uncontrolled Premium Freight Driving 25–30% Excess Logistics Spend

Because service-part deliveries to dealers are time critical, tool-related disruptions quickly escalate into premium freight, inflating logistics spend by hundreds of thousands to millions of dollars annually and hiding true cost-to-serve for aftermarket programs. • High frequency AOG/critical repair shipments normalize premium freight as a standard service, inflating logistics costs by an estimated 25–30% on this lane mix and driving $2M–$5M per year in avoidable spend across plants, while true cost-to-serve for dealers/repair shops is obscured. • Premium freight becomes a recurring line item instead of an exception, driving an estimated $2M–$5M per year in excess logistics spend from normalized expedited air and dedicated trucks, margin erosion on key retail programs, and untracked chargebacks tied to late or incomplete deliveries.

APQP coordinators maintain launch and prototype shipment trackers in Excel and PowerPoint, email suppliers and logistics for urgent pickups, and rely on manually tagged 'expedite' codes in ERP or purchase orders to later estimate how much premium freight was used on a program. • Coordination with remanufacturing customers and logistics is done through fragmented email threads, spreadsheets of hot orders, and manual prioritization lists; premium shipments are booked outside of any standardized workflow and only later reconciled manually in finance. • Inventory control specialists manually flag at‑risk items from ERP/MRP reports, then email or call logistics to request rush shipments and later track premium freight in ad‑hoc Excel files or shared folders, often reconciling against carrier invoices by hand at month‑end.