4 Strategies For Reducing Your LTL Cost Per Pound

Written by Paul Forand

LTL-costFor many smaller businesses, LTL ("Less-Than-TruckLoad") shipping is the option that makes the most sense.  If they don't have enough volume to demand a full truckload, LTL allows them access to plenty of shipping routes at lower prices than hiring their own truck. 

However, even using LTL, shipping charges can creep upwards quickly.  This is even more true right now, with shipping costs going up almost across the board. For a company shipping via LTL, keeping their price per pound low can be vital in maintaining their current profitability.

We've got a few suggestions for companies looking for lower per-pound rates, when dealing with smaller shipment sizes.

Great Ways To Lower Your LTL Cost Per Pound

1 - Re-evaluate the current field of LTL providers.

Many companies partner with an LTL-based shipping firm to help route / optimize their shipments.  If you're using one, it may be a good time to take a new look at the field and see if any options have popped up that would better suit your needs.  The freight industry is undergoing a lot of change at the moment, and it’s a vastly different market than even 5-10 years ago.

Likewise, investigate options beyond LTL companies.  If your shipment sizes are also going up, it may be time to consider full-truckload shipping.  Or investigate prices with couriers like Fed-Ex or UPS for smaller orders.

2 – Analyze and optimize your shipment strategies

It’s no secret that as shipment sizes go up, the cost per pound typically goes down, so it is important to understand how weight breaks affect the cost per pound.

If you ship many minimum charge LTL shipments, it may look like your cost per pound is exceedingly high. However, if you shipped the same products in larger quantities or at a higher weight, your cost per pound would be lower.

A small change in purchasing behavior can result in big savings over time.  Consider, for example, how many envelopes you order over the course of a year.  Rather than buying them on a quarterly basis, if you increase your order size to a yearly supply, this larger order will result in a heavier shipment which, in turn, will lower the cost per pound.  Any time you can identify a purchase that could be made into a larger shipment, and shipped less frequently, it will optimize your shipping cost.

There are many methods shippers can use to consolidate shipments to take advantage of a lower cost per pound, like combining multiple orders going to the same destination.

3 - Hire a supply chain expert.3pl-cost

For companies with a serious expectation of growing shipments and larger supply chains, a dedicated Supply Chain Manager or Transportation Manager starts making sense.  An accredited expert with relevant experience is likely to demand a salary in the high five-figures, but they'll give you true in-house talent.

The right Supply Chain Manager, empowered to optimize your systems, can often easily justify their paycheck in terms of long-term savings.  This also gives you someone who can spend the time researching custom solutions, like near-sourcing shipments to reduce mileage.  

4 - Get a full-fledged 3PL.

Third-party logistics aren't just for large companies any more!  In fact, when companies lack the budget (or the willingness) to pay big money for an in-house expert, a 3PL provider creates a great balance.

With a 3PL, you get an entire team of experts, including a dedicated account manager, for less than the cost of a single new employee.  They can also update your computer systems with the latest automation software to reduce back-end expenditures.

For many companies, this produces a compelling mix of budget-friendliness and long-term cost reduction.  In many cases, a 3PL can reduce your overall transportation costs and create value company-wide.

There are more options than ever for companies looking to reduce their shipping fees.  For more information, or a free consultation, contact ReTrans Freight today!   



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