Shipping and freight costs are a budgetary concern for every business. They can make up substantial portions of a company’s overhead costs and even prevent smaller businesses from achieving the growth necessary to remain competitive in their industry.
While shipping costs are on the rise, not every business has to absorb the increase in pricing. There are simple ways to reduce the costs associated with moving your freight, allowing you to not only save money, but also keep your prices low.
Find better carrier rates
One of the major shipping costs centers around carrier rates. As a consumer of a service, your business can and should shop around for carriers that offer the best rates. Working with a third-party logistics (3PL) provider or implementing a transportation management system (tms) can help you find the best carriers who offer the most affordable rates.
Some carriers will offer discounts, but keep in mind that these discounts may not result in lower prices. Always double check the carrier’s base rate and compare it to the discount they are offering. A smaller discount on a lower base rate may yield a lower total price than a larger discount on an inflated base rate. Dig into the data to find out which rate is actually the most affordable.
Build carrier relationships
Shopping around for the best carrier rates is essential, but once you find a carrier that provides amazing service at an affordable rate, it’s best to forge a long-term partnership to help keep those rates low.
Carriers tend to gravitate towards consistency and are more willing to work with shippers who offer them a steady lane volume. You can end up paying a reduced rate by offering a steady flow of freight that matches the local route of your preferred carrier.
Become more flexible and efficient
Carriers also offer lower rates to shippers are more flexible and efficient. LTL shipping, for example, allows you to ship more product less often, meaning carriers will have to make fewer trips. If you can convince your customers to place larger orders, you can reduce your freight and carrier costs.
You can also help carriers become more efficient and reduce their costs by:
- Shipping on off-peak days
- Allowing overnight pick ups
- Decreasing warehouse load and unload times
- Use load boards that allow carriers to see if they can pick up your freight on their backhaul
Reduce risks and damages
Identifying supply chain risks like freight damage and theft and carrier obstacles can reduce your shipping costs. Work with your team to develop a sturdy risk identification and management program that can be seamlessly integrated into your shipping strategy.
Don’t resist change
One big mistake that shippers make is falling into a routine that simply works for them. While your freight may be getting shipped, you are missing out on potential savings that can reduce your overhead costs. Don’t settle for a service that “just works,” let King Solutions find you the savings your company needs. Contact us today to get started.