4 Ways To Minimize Inaccurate Freight Charges That Erode ProfitsWritten by Paul Forand
If you're trying to get a handle on your shipping charges, one of the best possible starting points is with estimated freight charges. While shipping is never a 100% guaranteed operation and accidents do happen, in most cases estimates of the charges can be quite accurate.
Poor estimates can harm a business in multiple ways. End-recipient customers do not enjoy discovering that their freight bill was underestimated and that they're on the hook for charges they weren't expecting. In some cases, a shipper may even have to absorb those charges for the sake of customer service. Either way, poor estimates can quickly damage client relationships and, if it becomes an ongoing issue, can drive them to other suppliers.
The good news is that there are much better processes that can be deployed, and you've got a lot of options in how to do it depending on your budget and levels of expertise. Let's take a look...
Effective Ways To Create Better Shipping Estimates
1 - Database-driven product information.
Whether you hire someone to do the work, purchase an existing database, or do the work manually, this is a must-have. You need a comprehensive list of everything you ship, including the materials used to package the product like pallets and plastic wrap.
Ideally, this should include accurate weights, measurements, commodity classes and descriptions, and any special requirements needed when shipping. Does the product need refrigeration or hazmat services or any other extra equipment? Make sure that info is included.
Having an accurate product database and making it available to everyone in your operation will increase your estimate accuracy more than nearly any other single move.
2 - A payment and auditing system.
These can potentially be incorporated into your existing computer system, but one way or another, you need a verifiable way to compare your estimates, bills, pay-ins, and pay-outs. Besides the direct savings such systems inevitably bring, they can help you identify if any products are consistently causing shipping errors.
If a company ships hundreds of products, and one of them is mis-categorized, this can be extremely hard to spot by the people paying the bills. An automated system, however, can flag them easily.
3 - Direct carrier integration.
Another popular option, especially once a company has an accurate product database in place, is tying their systems directly to the carrier(s) they use most often. Most well-known common carriers have plugins, which can even integrate into your web sites, and many smaller carriers have custom software if you ask.
In exchange for giving them exclusivity, the carrier may allow you to link to their web services at various points across your systems for shipment rating, like at the point of sale.
4 - Outsourced 3PL services.
For companies lacking significant on-site freight software and systems expertise, or a dedicated Transportation Manager, a Third-Party Logistics firm makes a lot of sense. They have the experts needed to quickly improve your systems, as well as ties to many different carriers and contacts. They can often help you custom-pick carriers to integrate into your system based directly on your needs.
Plus, their industry contacts usually mean they can leverage freight buys at much lower costs than a single company could negotiate on its own.
The cost-savings can quickly add up. To find out more, just contact ReTrans Freight for a free analysis of your needs and potential savings!