Tips To Lower Your Freight Costs
If you ship goods, freight costs are a significant part of your company’s expenses. Choosing the best mode of transportation for your company, understanding how cargo is moved through the supply-chain, and improving supply-chain visibility, will all help you to save money.
DON’T CATEGORIZE EVERY SHIPMENT AS URGENT.
Whether you’re shipping internationally or nationally, it’s important to do your research and find the best options. It’s important to know which shipping method will be most cost-effective.
Ask yourself: What are current freight market trends? What should you be aware of within the current market?
Make sure your logistics provider is informed on current and upcoming market news, such as a general rate increase (GRI) or upcoming unexpected market changes. For example, at times, freight rates reach their peak season, like prior to Chinese New Year. During this time, all ocean carriers work with full capacity because many importers rush their goods before China closes for a long holiday.
Overall, make sure you are aware of the market – managing your production time before the peak season, and shipping your cargo when freight rates are lower, can save you a lot of money.
MAXIMIZE YOUR LOADS.
The more boxes/products you load in an ocean container, the less you pay for each product. Ocean carriers charge per-container from point A to point B. You pay for the container, so you should max out the available space in your container. There is a small ocean freight cost difference between 20″ and 40”/40HQ. Using a 40HQ container instead of a 20” one is a big savings, since you can double the product you are loading with just a small cost difference.
The 4 most-common container sizes used for ocean transportation are 20″, 40″, 40HQ, and 45HQ. Below is the typical estimated CBM you can fit in to a container:
20” – 27 CBM
40” – 57 CBM
40HQ – 67 CBM
45HQ – 78 CBM
BUY FOB.
When you buy FOB, you control the freight and freight cost. You will have a better chance of locking in a more competitive rate. If your term is CIF, then it is your supplier’s responsibility to arrange freight to the destination port. If the supplier pays the freight, they will add the cost of transportation on top of the product selling price. Why not take control of the freight since it will be part of your landed cost?
CHOOSE THE RIGHT TRANSPORTATION METHOD.
You can use a mix of transportation if necessary. Combinations of air, ocean, and ground transportation can prove to reduce transportation time, while reducing cost. International transportation can be a complex mode of serious shipping, or it can be a simple way of moving cargo from point A to point B. Choosing the most cost-efficient and timely transportation mode is critical. The most common methods of freight transportation are air, ocean, truck + air, and ocean + rail. Discuss these different options with your logistics partner to ensure you are shipping your cargo at the lowest overall cost.
Explore Opportunities To Consolidate Shipments
Less-than-Truckload (LTL) shipments are a convenient option for smaller weight. But if you can manage to consolidate shipments of different products or shipments for different customers into one shipment, you can save money by using more full-truckload shipping (FTL).
AUTOMATE YOUR LOGISTICS
If you can track your shipments from when they leave your door to when they are received by your customer, you can spot problem areas in your transportation logistics. It will also give you real-time information about unexpected delays, allowing you to react faster and more cost-effectively.
CONSIDER WAREHOUSING SERVICES
If you do a lot of shipping from the same point A to the same point B, especially over a long distance, it may be an option to warehouse goods closer to your customers and reduce your transportation costs.
Truckload vs. Less than Truckload: What’s the difference?
Deciding between less than truckload (LTL) shipping and full truckload (TL) shipping is often a hard choice when you aren’t sure of your options. A lot of factors weigh into freight shipping, and an assessment of each element can steer you toward the most efficient method based on your particular needs. Factors like freight dimensions (such as length, width and height), freight classification and special services are all things to consider when choosing a shipping method.
We’ve outlined some of the fundamental differences of truckload vs less than truckload freight so shippers can book with confidence.
What are less than truckload (LTL) and full truckload (TL)?
Truckload and less than truckload are both excellent options, but what are they? The transport of freight that does not require the entire space of a truck is also known as less than truckload (LTL) shipping, whereas full truckload (TL) shipments take up the space or weight limit of an entire trailer. Depending on your specific freight requirements, one option is likely better suited than the other.
A closer look at less than truckload (LTL) shipping.
Less than truckload (LTL) shipping allows multiple shippers to share space on the same truck. It is the more cost efficient option of the two, with multiple companies paying for their portion of trailer space. The less than truckload (LTL) shipping route is also ideal for businesses who have freight shipments less than 15,000 pounds.
To protect items while in transit, it is essential to consolidate goods into large, crated or palletized packages. It is important to prepare the shipment to endure handling during transfer to multiple trailers before it arrives at the consignee or destination so that freight doesn’t become damaged.
A closer look at full truckload (TL) shipping.
If less than truckload shipping doesn’t meet your needs, then full truckload shipping might be for you. Shippers use full truckload when:
- There are enough items to fill an entire truck.
- The customer prefers a whole truck dedicated to their goods.
- The freight is time sensitive.
- The weight makes it more cost effective than less than truckload.
With TL, shipments typically travel on only one truck with one destination, so delivery time estimates are often accurate and fast in comparison to LTL shipping.
The chance of possible damage to items during transit also decreases since there is less handling of the freight at multiple stops. Truckload also makes more sense when the freight weighs more than 15,000 pounds, or the company has more than 10 pallets worth of goods to transport.
How To Lower Truck Freight Shipping Cost
Surprisingly, many people are not aware that shipping costs are flexible. We assume most of the time that the rates are the same every time. For a very long time, people have paid a fixed price. However, many are realizing that they can negotiate the prices. There are various simple ways in which one can use to lower their shipping budgets. The methods help you obtain a lesser amount while maintaining the dignity of your business. You will manage to save a lot of money and time by lowering your truck freight shipping cost.
Ship Your Goods During The Off-Peak Season
One of the things you have to do is asses your business. Some questions to check and put into consideration include:
• What type of goods are you shipping?
• What is the nature of the freight you are transporting?
The above questions will determine what time you need to transport your goods. Truck freight shipping cost for perishable goods are hard to wait until the off-peak days. However, if your loads are non-perishable, it is possible for you to transport them earlier or later when prices are low. The urgency in which you need to ship the products is also another crucial element. Truck freight shipping cost can potentially increase dramatically with a poorly managed logistics program. If the freight shipment is not urgent, you can wait till off-peak to transport the load. Most off-pick days are on Friday when the shipping companies are desperately looking for customers. You will have an opportunity to bargain the cost of transportation.
Develop A Healthy Relationship With The Shipping Carriers
Finding a specific company to deal with your freight shipping needs can be hard at times. However, when you find one, make sure you stick to them. Create meaningful friendships that will help your business. Holding on to one carrier builds trust and loyalty. You will be able to enjoy the freight services at a reduced truck freight shipping cost because they know you. Consistency is an attribute that will secure you an affordable contract that is different from other unreliable customers. The company will inform you of the best times to ship and consider you first in giving when securing a truck.
Inform Yourself About The Truck Freight Shipping Industry
It is essential to take the responsibility of knowing the various prices of your freight. The knowledge may help protect you from carriers who may want to take advantage of you. Do not leave the responsibility solely to the transportation trucking company. You can take charge by subscribing to trade magazines and informative blogs. Also, work with a quality freight broker, freight brokers can be indispensable to your businesses success. A quality and trusted freight broker can help you secure trucks in competitive environments. The more informed you are the better decisions can be made. Having relevant information will help you plan early and choose a time when trucking prices may be at a discount.
Freight shipping definition.
Freight shipping is the process of transporting commodities, goods and cargo by land, sea or air. Common types of freight shipping over the road include truckload, less than truckload (LTL) and intermodal. Freight itself can be defined as the goods transported by truck, train, ship or plane. The means of transport commonly associated with freight shipping are trucks, railroad cars and large ships carrying containers.
Benefits of freight shipping.
Freight shipping is key for getting goods to a destination on time, safely and in a cost-effective manner. Whether shipping by land, sea or air, there are a number of benefits to consider:
- Top carriers: When shipping important freight, you want to make sure your goods arrive safely and on-time. Online freight service providers work with high quality contract carriers.
- Save on shipping costs: Businesses may not have adequate time to research carriers, get quotes and find the best rates for their freight. We can help you find competitive rates from qualified contract carriers.
- On time freight: When you have time sensitive freight, you may have to get it to your customers within a tight delivery window. With the variety of freight shipping service levels available, you can select the method that best fits your time frame.