Having a business can be an expensive investment. Wages, taxes, energy, water, and other costs must all be paid. Freight shipping charges make up a significant amount of your budget, and as your firm grows and evolves, so do your expenditures. To prevent cost inflation, you may very well be looking for strategies to cut unneeded costs while maintaining your company’s integrity. You may save both time and money by making a few easy adjustments.
To assist you, the following are some of the greatest ways to save money on freight shipping charges for your company:
- Be informed about your transportation option
Water, air, and ground are the three primary modes of transport for your commodities. When it comes to overseas commodities, ocean shipping is frequently less expensive than air shipment. If your items are local, trains may be less expensive than vehicles. Combining the three modes of transportation can save costs and improve delivery times.
Another alternative is to outsource your shipping, which can save you anything between 3% to 5%. Shippers who have their freight fleet pay a 25% premium over logistic transportation providers. When outsourcing, choose a broker that is trustworthy and has a strong track record.
- Assemble all of your goods and put them in one place
When compared to unconsolidated cargoes, consolidating your goods in one country can save you up to 25% on shipping costs. The idea is straightforward: smaller shipments can be combined into larger shipments. Consolidation programs have benefited large corporations such as CVS and Colgate, and they can benefit your company as well.
Consolidating may take longer, but it saves money and ensures that clients receive the same product in a lesser quantity. This helps to keep dock bays open while lowering labor expenditures. Finding acceptable shipping partners can be done through local Chamber of Commerce offices.
- Use Packaging, Product Design, and Cartons Wisely
Packaging makes up for around 10% of each supply chain dollar, while warehousing accounts for about 25% and freight accounts for 60%. When evaluating freight efficiency, it becomes crucial to examine design and package parameters.
You can get more value for your money when shipping if you reduce the amount of space each product takes up.
You can choose shipping materials that match your needs without spending a fortune.
Reduce the quantity of support packaging used in cargo as another technique to pack wisely. Airbags, strapping, blocking, and bracing are all used to keep things from bouncing around and getting damaged while being transported. Before you ship, talk to your carrier about the best quantity of packaging for your product. This not only saves money on supplies but also frees up extra space to accommodate a larger number of products.
- Ship Less Frequently, but More
Encourage your consumers to buy in bulk or place larger orders to save money on shipping. It is more efficient to ship ten pallets in one day than two pallets every two days. Consider offering free shipping on orders exceeding a certain amount of money, as well as other incentives to encourage customers to buy in bulk. The same principle applies when engaging with merchants. Give them additional incentives to order in bulk to save money and run a more profitable company.
- Make Use of a Load Board
Load boards can also help you save money in your business. If you have a one-time shipment, search for a carrier that can backhaul your product. Backhaul is popular among carriers because it helps them recoup costs for miles that would otherwise be empty.
If you look around long enough, you might be able to find carriers who would transport your shipment for simply the cost of fuel plus a little more. This might help you save 20-40% on your business expenses. Look for local carriers in your most frequently shipped-to areas to save money on shipping. Offering later collection dates increases your chances of finding someone to backhaul your package.
- Off-Peak Shipping
Consider shipping during off-peak periods like Fridays when planning shipments. Unless you’re selling perishable items, there’s no reason to pay for shipping during peak hours.
The majority of consumers prefer to have their products ready to be stocked in the store by Thursday so that they can be ready for the weekend. Of course, this is dependent on the type of goods you’re transporting, as desktop laptops have a much larger timeframe than perishable vegetables. Mondays are also low-traffic days, therefore shipping on these days can save users 10% compared to shipping on peak days.
- Building good relationships with Carriers
While it is common practice in today’s society to shop around for the best cost, having a long-term connection with your providers might have additional benefits.
Developing a long-term friendship relationship can provide transportation management benefits to the firm as a whole.
The contract also enables the carrier to locate additional consumers in your area, resulting in a more efficient network with fewer dead miles. The carrier makes more money and may offer you better prices if they have more clients.
Contracting a consistent lane density can help in the creation of networks while also lowering expenses. The more dedicated you are to your carrier, the more dedicated they will be to you. When capacity is limited, your carrier will prioritize freight from customers that have been with them for a long time and have consistent, or reliable, freight volumes.
- Have Full Knowledge of the Tariffs
It is critical to gather tariff information when shipping overseas to save money. Non-tariff trade barriers exist to assist minimize the number of products produced in sweatshops, and passing them can be costly.
- Agree to ship a fixed volume
Standing capacity is a strategy used by larger companies to cut transportation costs. The company agrees to buy a specific amount of space from a carrier regularly in exchange for discounted rates and preferential treatment. This method may not be appropriate for extremely small enterprises, but it may be appropriate if you ship merchandise between permanent sites regularly. Having standing capacity protects you from paying much higher prices if the demand for transportation increases.
- Analyze data to find freight flaws
Most aspects of a business’ inventory operations are covered by modern inventory management systems, which collect a substantial quantity of data. This information can be used to spot instances of poor delivery performance and figure out what’s causing it. Shipping records, for example, can be utilized to find carriers or shipping channels with significantly larger breakage or late delivery rates.
- Shipping your goods should not be incredibly expensive.
- Do not fall into the “this is how it’s always been” trap.
- Make an effort to save expenditures and improve your company’s overall profitability.
- Choosing the most cost-effective mode of transportation and using the same carrier and load boards are all easy steps that can save a lot of money.
- Change isn’t always a bad thing, and saving money while doing so is always a plus.
If you’ve been seeking a way to save money on truckload freight and turn your supply chain into a profit center, take advantage of the above-mentioned points.