Easy Ways To Reduce Freight Shipping Costs

Shipping is expensive - especially if you are a business relying on frequently moving goods between different locations. Understanding the costs in shipping freight can help any business make informed decisions on which carriers or transportation companies to use, and for the best price. There are a lot of factors that determine the price of freight shipping. By familiarizing yourself with factors which affect freight shipping rates, you can make informed choices to save money and grow your business more efficiently.

Factors Affecting Freight Shipping Costs

The transportation costs for a shipment will vary based on a number of factors. There are elements which are outside a shipper or carrier’s control, such as fuel prices or taxes paid on the shipment. However, there are also factors which can be controlled and can help reduce freight costs. Packaging, shipping times and planning ahead are all essential factors which weigh into the price or rate for shipping. By understanding  how to get the best rates and most efficient shipping methods, you will benefit from applying some of the following methods to reduce freight shipping costs: 

Consistent Lane Volume

In order to get a better deal from a carrier, shippers could benefit from seeking out carriers to contract specific lanes they will use most often. If you are shipping a consistent volume to the same destination each time, then you are more likely to receive a deal from the carrier, offering a lower rate. The consistency will also allow carriers to optimize routes, as they are transporting in a steady lane. You will want to identify which lanes you will require, and then shop around for a carrier to meet your needs.  

Consolidating Shipments

If you are shipping a number of smaller shipments, then you may want to consider consolidating your shipment to save costs. The consolidation method involves combing a number of smaller shipments into one big one, which can make transport more efficient and cheaper. You can also opt for pool distribution, which is where several shippers combine their shipments into one major one, as they are heading to the same destination. In some cases, this is also known as freight consolidation, where a third party consolidates multiple shippers freight into one, for cost saving purposes.

Networking With Carriers

In order to find the most consistent contacts or rates, your best bet would be to work on building connections with carriers or transportation companies. In the industry, many shippers may seek out the lowest rate, but consistently rate shopping can lead to wasted time and a frequent switch between carriers used, which means more hands on your freight and lack of trust overall. Rather, it may be beneficial to focus on building consistent partnerships with specific carriers, by paying them on time, planning ahead for consistent volumes or being open about your needs. Having relationships with a few select carriers will lead to better rate negotiation and an establishment of trust for the carrier handling your freight.

Increasing Lead Time

Increasing shipping lead times is one of the most effective ways to reduce costs, as it provides carriers advance notice of a shipment and gives them time to prepare. Increased lead times leads to lower rates, as carriers can allocate their resources in a more efficient manner, and help avoid any rush charges or unforeseen fees. In order to get the most accurate lead time, it is important to consider production time, transit and any potential delay which may occur. A clear production schedule would be the key to getting the most accurate lead times.

Optimize Loading Practices

Reducing loading time can save money on fuel and driver costs, and ensure that trucks are not waiting for too long, which can become expensive. Using technology to accurately sort or organize freight and automating some loading processes such as using barcodes to identify shipments or machinery to transport goods toward loading onto truck, can help save time and money. Using technology to ensure there is no backup or congestion at the dock can ensure for quicker pick up and delivery times. Some shippers can also benefit from offering late pick up times, which can work with a carriers schedule and lead to lower rates, as the carrier can plan better or avoid rush and  congestion in traffic.

Shipping During Off-Peak Times

One easy way to save money is to choose to ship in off-peak periods, as this can lead to lower costs. Many clients want to have products stocked by Thursday, so shipping on Fridays for instance, can save you in costs. However, it is important to consider the type of freight you have, as some freight may have different windows for when it needs to be stocked.

Improve Your Packaging

Packaging your goods in an efficient manner can help reduce freight costs, because it can reduce the weight and size of your shipment.  It is important to consider the product size and needs, when packaging. Lightweight packing materials and more compact packaging can reduce costs by reducing the volume and weight of your shipment. However, do not skimp on protection, as you want your shipment to avoid damage in transport, so use efficient packing techniques but to not avoid safety packaging materials.

Shipping freight is an important part of business success. It's important to know the costs so that you can make informed decisions on which carriers are best suited for your company. There are a lot of factors that go into calculating the cost of shipping, but knowing how to make some of these factors work to your advantage, can help you avoid any unnecessary costs and save you money in the long run.