Best Practices for Managing Your LTL FreightWritten by Neal Willis
- Align LTL Freight & Business Strategy
- Value Technology
- Incorporate Time Into LTL Freight Contractual Agreements
- Use Regional & National Carriers
- Know When To Outsource
Your freight management style should align with your business model. If your business strategy places more of an emphasis on quality, you’ll want to find and work with an LTL freight carrier who does the same. When researching carriers, it’s always good practice to evaluate their corporate value proposition along with their service record. In general, carriers that provide quality service should be utilized more often than carriers with low rates and poor service records.
Before choosing a partner carrier/provider, be sure to evaluate their technology offerings and capabilities, and choose a partner that can be accommodating to your technological needs. If you’re an ecommerce seller but your carrier(s) lack the resources to assist you with LTL freight rate integration into your ecommerce platform, then you’re not going to add any value to your supply chain.
Incorporate Time Into LTL Freight Contractual Agreements
When negotiating LTL freight rates, incorporating specific periods of time into the contractual agreements can be a great way to bring stability to your freight budget. With stable rates in place, freight costs can be more accurately planned for alongside forecasted sales volumes. With your LTL freight rates locked in for a certain length of time, you can rest assured that your freight rates won’t move until it’s time for the new contractual rates/terms to be negotiated.
Automate As Much As Possible
Work with your carriers to automate every process that you can. The more automated you can make your processes, the less likely you are to have human error interrupt the day-to-day operations. Automation saves time and money for both the carrier and shipper, and automating processes such as freight invoicing and payment can earn points for shippers with their carriers. LTL freight carriers appreciate the simplifying of operational processes and often reward shippers for cost cutting efforts with more stable rates and/or lower rate increases.
Use Regional & National Carriers
Employing both a long haul and regional carrier option is a necessity. While a regional carrier is smaller in terms of geographical footprint, they can typically provide better and faster service to the region in which they operate versus a long haul carrier operating in the same space. At the same time, a long haul carrier specializes in transporting freight across the country and won’t have to interline freight like a regional carrier would have to do for a cross country long haul move. Regional carriers usually offer slightly better pricing within their geographic footprint and long haul carriers do the same with regards to their national footprint.
Know When To Outsource
Focus on your business and what you do best, and recognize when your time is worth more than what it costs to outsource a service. For example, freight payment and audit is an area where companies have a tendency to spend a great deal of time and money. While it may cost a little to employ, a few freight billing errors caught by trained auditors can easily pay for the service.
With the right approach and partners, shippers can manage their LTL freight quite effectively, especially when automation and technology are used to the fullest extent possible. It’s important to choose good partners and to stay committed to them, whether times are good or bad.