5 Ways To Lower Your Current Freight SpendWritten by Neal Willis
Experiencing a reduction in LTL freight costs doesn’t necessarily have to be achieved through carrier rate negotiations. Lowering freight costs can be done in a variety of different ways; however, it’s important to make sure that service isn’t sacrificed for cost savings. Five different ways to lower LTL freight costs without having to negotiate better rates include: Employ a Freight Payment & Audit Service, Take Control of Your Inbound Freight, Automate & Integrate, Consolidate Shipments, and Route Shipments Least Cost.
Freight Payment and Audit Service
A freight payment and audit service can deliver hard dollar savings by spotting carrier billing errors and correcting them on your behalf. Professionally trained freight bill auditors have years of experience catching mistakes that may otherwise go unnoticed.
Automate & Integrate
Not only do you create administrative efficiencies when you switch from paper invoicing to EDI invoicing, you also save on printing and mailing costs for both you and the carrier. The more automated you can make things for you and the carrier, the better chance you have of helping the carrier keep the operating costs of handling your freight down. Carriers like shippers who make business simple and less costly. Spending minimal time and money on the front end will more than pay for itself time and time again down the road. Most reputable LTL freight carriers have the capability of sending shippers their freight invoices electronically via EDI and can usually send shipment status information and shipment document imaging electronically as well.
Take Control of Your Inbound Freight
Shippers almost instinctively turn to their outbound freight when working to cut costs but, don’t forget, your inbound freight is another company’s outbound freight.
Companies have been marking up freight for a long time and it’s nearly become standard practice. The process of managing inbound freight and vendor routings can be somewhat overwhelming; however, with a little help from tools such as a vendor routing portal and/or TMS software, you can begin to cut down, and possibly even eliminate, unnecessary freight costs that have been historically passed along to you from your vendors. Your inbound freight volume can even be combined with your existing outbound freight volume to create a more leveraged position of purchasing power in your LTL carrier rate negotiations.
Consolidate Smaller Shipments
Rather than making many smaller purchases and having them sent in smaller LTL freight shipments throughout the course of the year or any given period of time, it may be feasible for you to consolidate some of those smaller orders into one large order that costs less to ship.
Route Shipments Least Cost
Run rate comparisons across your carriers for all of your shipping lanes, especially if you haven’t checked up on your routings lately and are still using paper routing guides. The chances are very likely that you’re missing out on savings. To ensure least cost routing on every shipment, shippers can utilize web-based TMS platforms specifically designed to optimize shipment routings by running real time rate comparisons across carriers for every shipment and selecting the least cost carrier options by default. LTL carriers in today’s market are very granular in their approach to pricing and what used to be the lowest cost carrier for a particular lane may have changed since you last checked.