4 Ways To Develop a Winning Inbound Freight Management StrategyWritten by Paul Forand
There are, of course, two sides to the freight management coin - inbound and outbound. Getting a handle on your outbound traffic is relatively easy - after all, you control which carriers or third-party partners are carrying your loads.
Finding ways to optimize your inbound traffic is trickier, but just as vital if you're looking to cut down on your freight-related expenditures. The shipping costs of your components and raw materials ultimately influence the final price of your finished product. With better inbound freight management, you can create cost-savings throughout your organization and counteract rising freight rates.
Cut Production Costs With Improved Inbound Freight Management
1 - Arrange for suppliers to ship collect.
With a few phone calls to carriers, you can put together a list of rates for COD-style shipments. These will very often be less expensive than what you're getting from the suppliers themselves, since it cuts out extra fees they might be adding to your final bill. Your suppliers may grumble, but this sort of move is becoming more common among businesses looking to cut their costs.
2 - Check your freight volumes.
If you're going to arrange inbound shipping for yourself, the next step is to work on routing. Where are you sending the greatest volumes of product, and how often? (If you only have one office or production center, this is an easy question.)
You should consolidate these routes into the fewest possible loads. If possible, purchase in bulk and cut down on smaller individual shipments. Don't only look at your production materials - even everyday office supplies can be consolidated in this way, with larger and better-optimized loads.
3 - Notify your vendors.
Generally speaking, vendors are willing to go along with nearly any shipping arrangements you want as long as they aren't the ones doing the legwork. So once you have carriers lined up and a new handle on how you'll be consolidating your loads, pass the information on to your vendors.
If you have the resources, you might consider implementing your own Transportation Management System.
4 - Monitor and adjust.
There's a lot of up-front work with freight optimization, and the job isn't done once a new procedure is put in place. You should keep an eye on those numbers and be ready to adjust your system if there are any changes in buying patterns, cost structures, etc.
Likewise, keep an eye on regulations and schedule changes. If you've got an arrangement with your suppliers where you're calling the shots, they may not be watching out for regulatory changes that could affect you.
In short, be ready to re-optimize when things change.
Or, Consider A Third-Party Logistics Partner
It's certainly possible to get a handle on your shipping costs, but there's an easier option that could save you even more money - a Third-Party Logistics firm. They can bring you the expertise needed to optimize your shipping, while also bringing significant price leverage to the table.
A quality 3PL can also set up a new cloud-based Transportation Management System, and handle all the necessary communications between you and your inbound vendors.