Transportation prices have risen over the past year, but shippers can cut those costs through smart planning. The following tips will help in reducing your freight cost.
For most heavy cargo, choosing international air over expedited ocean might result in huge savings being lost. Consider time-definite ocean delivery; it frequently offers the same level of reliability and generally costs 75% less than air.
Don’t discount ocean freight even if the situation calls for the utilization of international air. It could still be feasible to fly your goods for part of the trip and load them aboard an ocean vessel for the remaining leg, depending on when your items are expected to be delivered. Your goods will travel fewer miles consequently, which will cut your freight costs.
Instead of choosing distribution centres (DCs) based on their alluring lease rates or tax benefits, consider how efficient they are for transportation. Higher shipping costs will cancel out any location savings if a low-cost site increases the number of miles or hand-offs in your supply chain.
Consider a deconsolidation centre close to your ports of entry to direct-ship goods to local consumers if your business only runs DCs hundreds of miles inland but sources products from around the world. This will cut back on unnecessary transportation costs.
Companies who choose LTL over truckload typically have to pay an additional 10% to 30%. Customers who often request several small deliveries should be persuaded to switch to fewer frequent delivery schedules through negotiation.
Tools for utilizing trailer cubes are only as useful as the dimensional data entered. Obtaining extremely detailed information on the contents of the most recent outbound truckloads will allow you to confirm the precision of your measurements. Run a better trailer cube application using the updated data.
Many businesses fail to consider the possibility that they are transporting their cargo using outmoded categories, which are more expensive. Consider applying for a less expensive product class if your company has made significant changes to its goods or packaging.
The provision of goods is a key concern for suppliers, not securing the most affordable shipping rates or fostering collaboration. Find a third-party logistics supplier with engineering expertise to execute it for you or if at all feasible, take responsibility for optimizing your inbound deliveries yourself. Make certain that you have the last decision in which carriers handle the merchandise for your business.
Analytical, strategic, and relational advantages that a more dispersed strategy can’t match are made possible by a single, concentrated transportation procurement operation. Benefits include greater transportation optimization, increased cost tracking, and improved capacity to bargain for more palatable volume reductions.
It could feel like a luxury for your business to ask logistics staff to engage in Lean transportation initiatives or analyze shipment trends. But in most cases, it ends up paying for itself through better insights that result in larger potential economies. By conducting their research, logistics teams may achieve some of the greatest transportation savings.