Shipping costs can be a real nightmare. It’s hard to tell when they’re getting out of control. But to even the best of businesses, problems with freight costs happen.
So if you find yourself wondering what to do about your freight costs, relax. Be glad you discovered the problem, rather than letting it silently kill your profit.
And if you have just such a problem, or if you now realize the importance of it at your own company, here’s what you can do to reduce your freight costs:
1. Ship On Off-Peak Days
A group mentality develops in nearly every aspect of business. Most companies want their product on Thursday so they can shelve it on Friday and sell it over the weekend.
But you can save around 10% on your shipping costs by shipping on Friday – an off-peak day. Mondays tend to be off-peak days too. If you sell non-consumer goods, shipping off-peak makes for a great savings opportunity.
2. Find a Consolidation Program
Want to save 25% versus unconsolidated loads? Combine your LTL shipments with other companies to help you both save some good cash.
You can start by searching at your local Chamber of Commerce. Or you could also contact a 3PL and ask about their retail consolidation program.
3. Stick with Long-Term Business Relationships
Using this approach, you can score an additional 5% that’s inaccessible to your competition. By “inaccessible,” we mean it would take them years to get the same discount.
You may feel tempted to end your current carrier relationships and find new ones to get lower prices. That’s one way to do it.
But, you can get nice advantages with longer-term relationships. This gives your carrier more time to create other relationships so they have a more efficient shipping network. With greater profitability on their side, they have the room to give you better rates. Plus, if you sign a multiyear contract, you can lock in those lower rates for some time.
4. Proactively Manage Lead Times
The more notice you can give your carrier, the better they can plan how their shipping works. That means they can offer you a better price. Their biggest cost is often paying for a semi-trailer that sits idly at your facility.
By managing your own lead times more efficiently and giving advance notice to your carrier, you can win up to 20% more off your shipping costs.
Armed with those four strategies, you’re positioned to save on your freight and reinvest that capital into other initiatives that can drive you past your competition.