In the aftermath of the pandemic, many businesses have felt the pinch of rising freight costs. By far, supply chain constraints and reduced trucking capacities have been the most notable contributors to these increases. At the same time, however, rising fuel costs haven’t helped the situation either. In the last year alone, diesel prices have increased by more than 25%! Given these developments, many companies are seeking better solutions to reduce the costs of freight trucking services. And the good news is that there are a number of ways this can be accomplished.
One thing is for sure: businesses need freight trucking services to fulfill their customers’ needs. While there’s little that can be done about fuel prices and trucking capacity, cost-cutting solutions still exist. There are a number of variables that determine freight costs, and several can be manipulated to companies’ advantage. Measures taken to improve the efficiency of existing freight trucking services naturally lower shipping prices. Likewise, partnering with a quality third-party logistics freight company offers additional opportunities. With that in mind, the following identifies eight effective ways to reduce freight costs for your business.
1. Freight Consolidation and LTL Shipping – One of the notable factors that determine freight costs involves weight, density, and space. Making sure your freight is highly consolidated when shipping can therefore save you money. Likewise, using freight trucking services that offer less-than-full truckload (LTL) opportunities also reduces shipping expenses. This strategy alone can save companies as much as 25% in freight costs.
2. Shipping on Off-Peak Days and Pickups During Off-Hours – All freight trucking services want to be as efficient as possible. This allows the best use of resources, which is quite important when trucking capacities are constrained. As a result, companies can save as much as 10% in freight costs by choosing to ship during off-peak days. They may even save as much as 30% by allowing off-hours pickups. By allowing freight carriers to optimize the use of their staff and equipment, you stand to save substantially.
3. Establishing Consistent Shipping Needs – Everyone likes predictability and consistency, and freight trucking services are no different. When you routinely ship freight on the same days and times each week or month, it becomes easier to provide service. While this may not offer huge freight cost savings, it could well lead to a 5% reduction. Plus, freight carriers prefer to work with dependable clients, which could lead to additional benefits.
4. Increasing Delivery Lead Times – When freight needs to be delivered in a hurry, freight costs will routinely increase. Most of the time, such circumstances are caused by insufficient planning and foresight. Freight trucking services may then have to arrange transport on the fly, which often raises the price. But with a little bit of planning and extended delivery lead times, these extra costs can be avoided. In some cases, companies can save as much as 15% in freight costs with these efforts alone.
5. Locating Backhauling Opportunities – As mentioned, freight trucking services like to be efficient and best utilize their resources. One of the most inefficient situations occurs when freight trucks must travel empty after a delivery. This can be remedied by “backhauling” another freight load during the trip back. And freight trucking services are more than willing to cut companies a discount in return for such truckloads. With proper partners and/or transportation software to locate backhauling opportunities, companies can cut freight costs by as much as 20%.
6. Reducing Freight Loading Times – Time is money, and the longer it takes to load freight, the higher the freight costs you’ll experience. Did you know that reducing load times by a single hour saves about $25 on average? Streamlining your freight management processes will save time for the freight trucking service. And if done consistently, this will allow you the chance to negotiate better prices.
7. Optimizing Freight Packaging and Dunnage – Without question, freight must be properly packaged to prevent damage. But at the same time, optimizing packaging for freight loading and delivery is also important. Similarly, choosing the right dunnage in the smallest amount can further reduce freight size and weight. All of these small things add up and can also be used to further reduce freight costs.
8. Creating Strategic Partnerships – Many of the recommendations for reducing freight costs are activities your company can pursue on its own. But at the same time, a quality freight trucking services partner can help you to an even greater extent. Many, including Fratogo, have transportation management software that enhances efficiency and lowers costs. They also provide a variety of 3PL services and arrange LTL freight shipping. And outsourcing these services can save your company time and money while improving quality and customer satisfaction. If you’re looking for the most bang for your buck, such strategic partnerships are definitely the way to go.
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