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Six Ways to Reduce Shipping Costs

Nov 26, 2017

Freight transportation is continually changing with preferred methods of shipping, fuel costs, government regulations, the role of technology in shipping processes, and more. One thing that hasn’t changed is the need to contain costs while improving efficiency. Freight optimization is a smart way to accomplish this. Let’s look at six strategies to optimize shipping.

Logistics Optimization and Cost Reduction.jpg 1.    Supplier inbound compliance: If you’ve already taken steps to improve your inbound logistics, you’ll want to verify that the rules put in place are being followed by your vendors. Periodically pull your records to confirm that this is the case and discuss identified variances with the offending suppliers. This is important since noncompliance can have a serious impact on your shipping budget.

 2.    Shipping mode selection: Are you sure you’re using the most cost effective and efficient shipping methods for all your freight? A combination of truckload, less-than-truckload (LTL), and intermodal are excellent options for non-rush loads.  For rush loads be sure to always compare various ground services with air to ensure that each time-sensitive shipment is sent the most economical way.

 3.    Avoid unnecessary charges: It’s a good idea to periodically audit your invoices to be sure that you’re being charged correctly and that you aren’t paying for any unexpected fees. Special services fees, incurred due to lack of planning or because you weren’t aware they would create an additional charge, can wreak havoc with your freight shipping costs. You can read more about these charges here.

 4.    Use appropriate packaging: Proper packaging not only provides protection for your freight shipments, it also influences their cost and prevents unnecessary damage claims. Be sure to use the best packaging for your shipment so you don’t end up paying more than absolutely necessary. Evaluate your packaging to be sure that you are taking advantage of any new options available to help minimize shipment costs and load protection.

 5.    Streamline shipments: Be sure to look for ways to minimize costs by optimizing loads. Do you have multiple LTL shipments being transported to the same, or geographically close, addresses that could be combined to achieve a lower rate? Also be sure to look at frequency of shipments to the same location. Reducing frequency may help facilitate this goal. When shipments are traveling to a common address from different sites that are geographically similar there may be opportunities to combine shipments as well.

6.    Use local resources: Underutilized local routes are often forgotten. It’s important to consider local and regional shipping options when transporting freight within their coverage areas. If they have underutilized routes you may be able to negotiate lower rates when these are the routes where you need your loads to move. It can be a win-win for you and the carrier because they keep costs down by keeping their trucks full and you save money on shipments. 

Give these strategies a try to reduce shipping costs and increase efficiency. Freight optimization will improve your bottom line. Need an expert to help with this process? Call American Group by phone at 866-553-6608 or by email at Info@ShipAG.com

Photo attribution: Copyright: <a href='https://www.123rf.com/profile_convisum'>convisum / 123RF Stock Photo</a>