Today, transportation management is more than just ensuring freight moves from one point to another. Shippers have to use more resources to fulfill ever-increasing client requirements.
Savvy shippers either invest in these resources themselves or outsource to service providers with the resources. To survive in the 21st century, all shippers much find a way to reduce costs without losing their competitive advantage.
This article offers ideas to improve logistical support on both sides of the divide. Reducing shipping costs without affecting service delivery allows third-party logistics companies to retain their competitive advantage. Clients may, in turn, benefit from such cost savings and create lasting relationships.
1. Leverage Predictability to Offer Inventory Flow Efficiency
While it may not be possible to tell how much freight you’ll get from day to day, patterns emerge over time. By planning ahead of time for your shipments, you'll be able to ship at lower prices.
3PLs and carriers can plan with your freight to deliver more efficiently, and you'll be less vulnerable to fluctuating costs. Also, you can count on having support even during peak periods when carriers favor existing clients before taking on new ones.
2. Plan for Deliveries in Advance
Once again, you can use past information to predict your future freight volumes, and reduce costs on their basis. For instance, you can choose off-peak shipping days to reduce upfront costs.
Most carriers are busy from Tuesday to Thursday, to ensure that products are shelved by Friday in preparation for the weekend. Fridays and Saturdays are off-peak with many carriers, as are Mondays. Find out which days have low volumes and use those days to your advantage.
Of course, it goes without saying that this depends on the kind of freight being moved. Fresh foods naturally must be delivered immediately and cannot be bought in excess.
3. Maximize Your LTL Freight Volume
Carrying on from the previous point, it will be cheaper to transport nine pallets once a week than three pallets every two days. LTL loads are money guzzlers, but they can be optimized to take full advantage of the minimum costs per size. If the luggage becomes larger than the maximum allowed, fill it up with other freight to get to the ceiling of the higher range.
Place separate components in boxes that fit exactly, so that you can maximize the number of boxes that fit onto the pallet. Your broker/carrier can give recommendations on how to maximize the space you’re paying for.
4. Look for Consolidation Plans for Small Shipments
Consolidation plans combine LTL shipments with other consumers’ loads and thereby cutting costs. Look for companies near you that need freight shipping services and look into the possibility of combining smaller packages.
Working a schedule means getting good delivered on time. For instance, several retailers in the can use one carrier to transport goods from one manufacturer. Each retailer will be responsible for their share of the truckload carriage charge. Keeping small packages until truckload capacity is reached increases storage/warehousing costs.
5. Build Relationships
Logistics professionals may be stuck between two rocks. On the one hand, upper management needs to see some cost reductions as part of their KPIs. Conversely, carriers offer certain discounts to long-standing customers, but their prices may not be the most competitive available.
However, starting from scratch each time there’s a cheaper carrier in the market can become counterproductive. Developing long-term relationships with carriers can offer more advantages than price cuts. For instance, the company is protected from market price fluctuations, which can be very high in peak seasons.
Another advantage is that carriers may deliver off-route without levying charges. Alternatively, your company enjoys preferential treatment during peak delivery seasons or with express packages. Your company may also enjoy discounts for the odd occasion you exceed pallet volumes on LTL shipments.
6. Optimize Lead Times
Save express delivery for when it is essential. If you allow the carrier to hang on to shipments until it is more expedient for them to deliver, you may enjoy cost savings. This means planning ahead and ordering at the carrier's maximum lead time.
Giving an idle trailer waiting to be filled in a customer's facility is one of the highest carrier costs. The opportunity cost that arises will be charged to that customer. For full truckloads, request shipping when you already have the maximum load ready.
7. Consult on Dunnage
Some products for long-distance shipping need bracing, blocking, strapping or airbags to prevent damage from knocking against each other. It is possible, however, to go overboard trying to protect your package. This creates a bigger package than you need when the extra space could store more luggage or reduce shipping costs.
Consulting with your broker/carrier can help to pack in a way that protects the products without carrying extra fluff. You can take advantage of dimensional weight pricing, which offers discounts for fitting within their desired boxes to enable them to ship more.
8. Improve Loading Times
In their pricing schemes, carriers factor in two hours for loading and off-loading, and part of this time cost reflects in your price. Improving loading times can, therefore, earn you some discounts with the carriers over time. Additionally, you may receive preferential treatment with the carrier during peak seasons when time is even more valuable.
Effective transportation is about reducing costs without decreasing service delivery. Logistics professionals should leverage the data they have to create optimal carriage plans that are efficient and affordable for long-term productivity.
Opus9 is a digital 3PL helping shippers save money by bringing technology advancements to the shipping process to ensure it is frictionless. Start saving today by getting a free freight quote.