Are rising freight costs affecting your bottom line? Managing these expenses can be tricky, but with the right approach, you can make significant savings.
What are the most common hurdles in reducing freight costs, and how can you overcome them?
Check out the video below to find out more!
This week, let’s explore ways to reduce freight costs, a common issue in logistics. Following a recent webinar on logistics costs, it’s clear that many businesses struggle with freight expenses. Here are seven strategies to help.
Avoid the Rate Cut Approach
While it might seem logical to ask your freight carrier for a rate reduction, this tactic is often unsustainable due to the low margins in the industry. A better approach is to rethink how you manage your freight, focusing on efficiency.
Volume Leveraging Across Branches
Pooling your freight needs across different branches or divisions can lead to better rates. By consolidating shipments, you can increase your volume with a single carrier, securing more favorable terms.
Ensure Transport Resources Fit the Task
Using the right transport resources for your specific needs is crucial. This includes selecting vehicles that are appropriately sized and equipped for the job. Regularly reviewing your transport resources can help ensure you’re not overspending.
Choose the Right Rate Structure for Savings
The rate structure you choose—whether per ton, pallet, or truckload—can have a significant impact on costs. Align your rate structure with your shipment profile to achieve better savings.
Related articles on this topic have appeared throughout our website, check them out:
- 10 Freight Management Mistakes and How to Avoid Them
- Freight Benchmarking: What Is It? Why Do It?
- Why Containerised Freight Shipping is Daunting for SMEs
- 12 Smart Ways to Reduce Your Freight Costs
- There’s a Less Frustrating Way to Negotiate Freight Contracts
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated August 21, 2024, under the title “How to Reduce Freight Costs – Key Tips Many People Miss“.
