There are some very obvious ways to effectively manage freight costs and expenses. The most common is negotiating lower shipping rates with carriers. However, just because your current LTL carrier is showing you a deeply discounted rate off their published prices, doesn’t mean you are paying the lowest price for your shipping. Here are some other factors that are important to consider when it comes to effective freight management.
Rate versus Discounts
As mentioned before, Larry was enamored by the idea of getting a big discount. But a big discount on an overly inflated price still leaves you paying more than necessary. So naturally it makes sense to look at the bottom line price for typical shipments for an organization.
Common Lanes versus Remote Shipping Lanes
In addition, where most companies focus on common and most popular shipping lanes when it comes to negotiating and establishing rates, it is the outliers or remote lanes that people are paying the higher prices for; sometimes excessive prices. Although a company might be getting good rates for popular or common lanes, it is the more remote lanes where the savings could really be had.
Don’t assume that fuel surcharges are fixed. Many companies are overpaying for fuel surcharges, often more than double what they could be paying.
We were speaking with the transportation manager of a company the other day who said he gets 6-7 quotes for every shipment the company sends. The company was averaging about 20-30 shipments per week. Perhaps that doesn’t seem like a lot. But upon more careful investigation, we figured that he was spending way too many hours per week just getting quotes; certainly more than they thought. With our web-based Transportation Management System, he was able to save almost all of this time.
Reviewing and auditing freight bills
Did you know that the industry average for inaccurate freight bills is 5-6%? In most cases the inaccuracy favors the carrier. The cost of inaccurate bills can cost a company, but so can an inefficient auditing process.
Dealing with damaged, lost shipments and reconciling claims
Most companies don’t factor in the time and resources that go into dealing with damaged, lost shipments and reconciling claims. A good freight management logistics company can either handle these issues for you or help you develop an effective internal strategy to deal with these issues in the most cost effective manner. A good idea is to deal your order with Stevens Trucking. They provide services through North America.
Shipment scheduling and paperwork preparation
It is important to consider the time spent scheduling a shipment and preparing the necessary paperwork including bills of lading. A good logistic management software program can save companies lots of time and money.
Dealing with Solicitations from 3PL, Brokers and Freight Management Companies
Qualifying carriers and dealing with the calls coming in from carrier companies soliciting your business can be a big time waster. Some shipping and freight managers have reported that they receive dozens of calls per week from people promising to get them lower rates. Very few suggest that they can help them save money by developing an effective freight management strategy that takes into account some of the issues discussed here.
In summary, most companies focus primarily on their shipping rates. However, they often overlook some seemingly intangible costs that could perhaps be costing them thousands of dollars more in the freight management expenses.