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How to Gain Control of Expedited Freight Costs

Jul 25, 2018

Cost containment is an ongoing effort. Controlling expedited freight costs can be more challenging than some. If you have a tight time frame you need to meet, you essentially have two choices -- pay the higher rates or choose to miss the deadline. That isn’t exactly true. There are other ways to contain, or possibly reduce, expedited freight costs.

What is driving your need for expedited shipping? 

If the use of expedited shipping is increasing, take a look at what’s causing this trend by considering the following:

Control Expedited Freight Costs-American Group.jpg

  • Analyze your shipping data to understand what’s causing this need. Things to look for are problems in the global supply chain, bad forecasts, missed supply or demand signals, etc.
  • Is poor planning the culprit? This might include not ordering necessary materials for production far enough in advance. 
  • Is Sales assuming that customers expect immediate delivery without asking? Be sure that they are confirming the need. And, when there is a requirement, pass these charges on to the customer.
  • If the fulfillment time promised to customers is an issue, can it be improved to utilize longer shipping times?
  • Is your distribution or manufacturing facility close enough to your customer base? If this is increasing the need for expedited shipping, perhaps relocation, or the addition of another facility, might be the answer.

When expedited is the only way 

Once you’ve considered all the potential ways to reduce the need for expedited freight shipping, there may still be times when it’s the only possible option. In this case, one effective strategy is to stick with one logistics partner. This might sound counter intuitive, but when quote requests are sent to multiple brokers prices are artificially inflated. The amount of equipment in a lane is static.  So when the same quote is sent to multiple brokers, they’re all trying to secure the same equipment for the same load. This results in increased demand, driving up costs. 

Determining what’s causing a more frequent need for expedited shipping is an important first step in gaining control of these freight costs. Once you identify the culprit, you can address it and reduce these expenses. When you have an unavoidable requirement for a rapid turn-around time, stick with one logistics partner. That will help build a stronger relationship while containing costs. Still need help controlling expedited freight costs? Contact American Group for assistance.

American Group is a 3PL with decades of experience guiding businesses through the selection, preparation, and shipping of their freight. Contact us for assistance with your next shipment by phone at 866-553-6608 or by email at Info@ShipAG.com. We’re here to make Shipping.Simplified®.

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