How to Lower Your Shipping Freight Costs in 2020
Forwarders and shippers tend to consider freight costs to be a major part of their total shipment cost. That's a very understandable assessment; suppliers and shippers are in a constant need for monitoring market conditions and costs to be better prepared for carrier rate negotiations. As businesses seek to streamline their operations, reduce costs, and increase efficiency, challenging the status quo of shipping expenses is an avenue that should be explored. Contrary to popular belief, there are indeed many innovative ways to reduce freight costs – from solutions as simple as using fright cost benchmark and market movement analytic tools, to generally sound approaches such as careful planning and choosing the correct shipment methods, and everything in-between.
This simple practice cannot be overstated; consolidating loads can save up to 25% of one's freight costs. Consulting your local business organizations or Chamber of Commerce can set you on the course to finding appropriate freight consolidation options, or even co-shipping options. Products from various suppliers can, indeed, be combined into single shipments – alternatively, one can even combine shipments with other companies in the vicinity to the same retailers.
Incentives to agree to consolidate shipments can be as simple as sharing an agreed percentage of freight savings with retailers, while vendor-managed inventory agreements are also always an option. On the end of customers, it is understandably more expensive to have frequent, small shipments than less frequent but larger shipments – encouraging customers to purchase larger, less frequent loads can thus only be beneficial.
Shipping during off-peak days and hours
This underused practice can save one up to 10% compared to shipping on peak business days and hours, and up to 15-20% off standard shipping rates if one opts for evening backhauls. Adjusting designated shipping times a day, or even a few hours, earlier or later, just enough to enter non-peak days and hours, can have a significant impact on total freight costs. Off-peak days like Friday are likely ideal for this approach, although Mondays are also low-volume days that could be considered.