Transportation services eat up a large chunk of business revenues. In 2016 alone, American companies shipped 2,953,348 million ton-kilometers of goods. It’s hard to even imagine the total cost to ship that many products.
Most business owners consider transportation costs something static that can’t be helped, but experts in the industry know how to keep freight costs down. A large part of saving in transportation costs comes from the quality of logistics. Unfortunately, this department is also one of the most complicated sectors of most businesses. It can be difficult to work out the best system for maximum saving. If you’re looking to reduce your transportation expenditure, check out these 5 easy ways to save money on freight costs.
1. Establish Reliable Freight Volumes
Like with most companies, the more you do business, the more benefits you gain from the relationship. Carriers are the same. If you’re loyal to them, the carrier will focus more on your loads than their less loyal customers. It’s easier for a carrier to ship freight volumes that are predictable. Of course, the carrier will prefer the company that models this consideration. Over time, the carrier’s efficiency will improve, saving you money.
2. Avoid Peak Shipping Days
Unfortunately, it’s not possible to avoid peak seasons like the holiday season or the Chinese New Year season. It’s much easier, however, to avoid peak shipping days throughout the rest of the year. If you’re shipping non-durable goods, this savings route may not be possible. However, durable and industrial goods should be able to ship earlier or later if you can work it out with your customer. Most retailers want their product ready for shelves before the weekend, so consider sending it out as early as possible.
3. Use a Consolidation Program
If you’re shipping to the same places as other companies, why not consolidate your freight costs? You would not be the first company to think of this. If huge brands are doing it, you know it much be an effective cost-cutting strategy. Through this method, you will pay a smaller share of transportation costs. It’s like carpooling for goods and products.
4. Improve Advance Notice
Planning is an often overlooked and undervalued part of transportation costs. Poor planning, however, can cost companies a lot of money. One of the best planning strategies to employ is to give your carrier as much delivery lead time as possible. Your trailers will spend less time sitting around, shipment will be more efficient, and you’ll save money in the long run.
5. Involve Logistics More
This is another tip that underscores the value of good planning techniques. Rather than limit logistics involvement to transportation alone, involve them in the packaging stage. Many times, the logistics team will have more insight into how various packaging designs will affect transportation costs than the packaging design team.
Reduce Your Freight Costs
Once you have an outline of the best solutions to high freight cost, it’s easier to make an action plan. Don’t wait to meet with your logistics team and discuss your freight volumes. You can arrange to avoid peak shipping days, give your carriers better advance notice, and include your logistics team in more product design meetings immediately. Once you’ve reduced your freight costs, take a look at our quality shipping containers. They’re a great investment for businesses that engage in both inland and maritime transport.
