8 tips to reduce freight forwarding expenses
Date: Wednesday, April 3, 2019
Source: Shipping and Freight Resource
If you use shipping services often, price may definitely a very important factor for you. Especially if you own a business that includes constant freight forwarding. People often think that the way carriers ship the freight are pretty much fixed and cannot change.
But just because everyone is used to the standard freight shipping ways and expenses, it doesn’t mean that is the only way. Luckily for you, there are many ways to reduce freight forwarding expenses.
Here are 8 tips to reduce freight forwarding expenses. Follow these steps and start implementing the changes that will help you today.
1) Evaluate your method of transportation
The first way to reduce freight forwarding expenses is to evaluate and reconsider your mode of transportation. Most noteworthy, sea freight transportation is typically a cheaper option than air freight, especially for international shipping.
On the other hand, the best way to ship freight locally may be by rail or road. Hence, chose your mode of transportation according to the products you are shipping and their travel distance. You can do research on the advantages and disadvantages of each shipping mode online.
Consider alternate ways of shipping or even a hybrid of multiple modes, if necessary. Get your free cost estimate online from several different companies and make a comparison. Maybe you can cut costs by using a combination of air, sea and ground transportation. Take time to do solid research and know your options.
2) Ship during off-peak periods
Keep in mind that shipping a day later or earlier can make a difference and reduce freight forwarding expenses.
For example, Friday is typically an off-peak day for shipping road freight. This is because most customers are trying to get their products delivered by Thursday, so it can be on shelves Friday and ready for sale during the weekend.
Interestingly, Mondays can also be slow days, resulting in carriers looking for road freight. Of course, this could be a great option. This depends on the type of your cargo. For example, canned goods have more flexibility than fresh goods.
Shipping on off-peak days could be an ideal option for the shippers of non-consumer type products.
3) Become a regular and enjoy the benefits
This may be a good way of getting the best price for services in general, in any industry, really. So, take some time to get to know your shipping carrier and work on building a relationship. Remind your carrier how long you have been using their services and that you are a loyal customer. Once your carrier knows they have and will continue to have steady business, they are likely to offer better conditions.
Hence, rather than switching to a new carrier, develop a good relationship with your current one. You will be surprised how much you can save through a strategic, long-term relationship. Every reliable company will do their best to keep regular customers.
Also, consider getting a longer-term contract as a way to lock in a better rate. This is a much better option than adjusting each year to the rising prices.
A good relationship and communication with your shipping company can improve the efficiency of your operations and reduce freight forwarding expenses. Being a loyal customer with a steady single lane, you can save up to 12% compared to standard pricing. Not bad, right?
Do research on prices, options and combinations of freight shipping that could suit your needs
4) Ship more products, less often
If you can manage to do so, try shipping more goods less often. Because it is a lot cheaper to ship ten pallets at once than to send two pallets every two days. Retailers tend to ship smaller cargoes more often, which only increases their costs. Obviously, some goods need to be shipped more often, but if that is not your case, try this method to reduce shipping freight expenses.
5) Be aware of additional charges
Maybe you didn’t know this, but carriers often perform other services than just driving. They may have to load or unload the cargo, wrap some pallets, or make additional stops.
Such services are often not included in your cost estimate. Consequently, customers sometimes end up being surprised when they receive their invoices. For this reason, make sure you ask the company about all the extra fees you can expect.
Some of the most common unforeseen fees come from not understanding and not applying accessorial fees. In order to learn to recognize these services that may be extra charged, consider learning some of the shipping jargon.
The more you know about how to identify them, the easier it is to reduce and eliminate these costs. Some common extra fees are:
- Weight adjustments
- Residential adjustments
- Additional handling fees
6) Go hybrid
In order to reduce freight forwarding expenses, you can try to use a mix of transportation. A good combination of ground, air, and ocean transportation can reduce transportation time and cost accordingly.
Try to use the best of every transportation mode. For example, if air shipping is proving to be too expensive for you, but shipping via ocean will last too long, make a combination including ground shipping as well, if necessary.
Not all discounts have the same value, so make sure you do the math
7) Hire carriers based near your ship-to points
If your ship-to points are on their regular route, it is more likely to get a lower rate. Reducing the miles is a great way for you to reduce freight costs.
8) Choose your discounts wisely
The first thing you should look into when you want to reduce freight forwarding expenses are the rates given by a carrier.
Not all carrier discounts have the same value. For example, one carrier can have a higher base rate than the other one.
As a result, a lower discount from the carrier with the lower base rate can be more beneficial than a higher discount from the more expensive carrier. Therefore, remember to always do the math and find the offer that gives you the best price.