7 Tips to Reduce Freight Costs

If your company ships occasionally, you don’t have to worry about the rising freight costs. But if shipping is an integral part of your operations, these rising costs should worry you. As it is, they already form a significant part of your expenses. So, like it or not, you must do something to tame these rising freight costs. And here are tips on how to do so.

1. Work with the Same Carriers

Hopping from one carrier to another looking for a lower rate may seem like a good idea. In fact, it may even reduce your freight costs for a while. But as you’ll soon discover, ditching your old carrier for a new one comes at a price.

For instance, when you sign a 3-year deal with a carrier, you pay the same rate until the contract period expires. This beats signing a new deal every year at a new and, most likely, higher rate. By the third year, you could be paying more than you’d hoped.

Also, given the choice on whose freight to give priority to, your new carrier will always choose that belonging to a long-time customer. As such, to reduce freight costs, focus on building long-term relationships, not on rates.

2. Give the Carrier an Advance Notice

A trailer should never have to wait outside your facility, for this is how carriers lose money. And when they do, so will you, for they’ll pass on this cost to you. Ideally, by the time a trailer arrives, you should be ready to load. But for this to happen, you must not only plan in advance but also notify your carrier in advance.

This way, you both align your assets with these plans. So when you ship, the carrier will have the trailers and warehouses ready, and you, the freight. No one will wait for the other nor lose money as a result.

3. Load Quickly

Sometimes, the trailer arrives on time, and you’re ready to load. But, you take too long to do so. Again, you force the trailer to wait at your facility. Remember, carriers assume you’ll load within 2-hours, and plan their schedules based on this assumption.

By taking too long to load, you ruin not only your schedule but also theirs. As such, instead of working with you, they’ll prefer to work with shippers loading in an hour. What’s more, they’ll charge these shippers less.

4. Reduce Dunnage

In many cases, shippers tend to overprotect their shipments, which ultimately affects costs. While some shipments will need sufficient packaging, strapping, airbags and more, especially during long truck rides or international shipments, going overboard will cost you. A good freight carrier will give you advice on how to reduce dunnage and costs.

5. Change Your Pick-up Times

Despite your reputation as a fast loader, you can still get your load turned down, especially during the day. Let’s face it; this is when everyone ships, so carriers are busy. When you call them to pick your freight, they’ll likely have another run to make.

But when other shippers retire for the night, the carriers who earlier turned down your load will gladly pick your freight. After all, they’ve no runs to make.

6. Ship Large Consignments

As a general rule, it’ll cost you less to ship one large consignment as opposed to many small ones. However, if your client list is full of retailers, this is easier said than done. They often make small shipments over many days.

What can you do to encourage them to make fewer but larger shipments? You must offer incentives for which one is Vendor Managed Inventory. This incentive ensures retailers never run out of stock, and they pay for a product only after it reaches their shelves.

7. Know Which Days to Ship

The final tip on reducing freight shipping costs is also one of the most important, yet it’s also one of the most overlooked – knowing which day to ship. The day you ship determines how much it’ll cost you to do so.

For instance, your customers will want their products on their shelves before Friday, in time for the weekend sale. This keeps carriers busy from Tuesday to Thursday, the high-volume days. But on Monday and Friday, they mostly remain idle. So if you want to ship products at low rates, these are the two days to do so.

To reduce freight costs, don’t hop from one carrier to another, choosing instead to build long-term relationships. Next, give them advance shipping notices after planning ahead. Also, load in less than 2 hours, and if possible, offer night pick-ups when other shippers have closed for the day. In addition, ship large consignments, not small ones. And finally, ship your products on Friday or Monday.