Two Simple Ways to Improve Your Freight ManagementWritten by Neal Willis
There are numerous methods by which companies can improve their freight management. A few of them are sometimes perceived as too costly to engage, however, before you can expect any type of return, you must first make an initial investment.
Spend More on Higher Quality Carriers
If you look at shipment routings based solely on the freight rate, you might be surprised to find that spending a little bit more for a carrier with a better service record, instead of the one with merely the least cost line haul, may prove to be an actual overall cost reduction. Upgrading to higher quality carriers may also improve customer satisfaction, which can enhance your bottom line. Oftentimes, the switch to a higher quality carrier means less frequent damages, fewer missed pickups and deliveries, and faster transit times, all of which can yield results in other areas of your business that positively affect net profit. Orders arriving to you and your customers on time and damage free might translate into more product being sold which, in turn, increases revenue. At the same time, fewer damages may mean a decrease in your costs of processing freight claims, which is another positive contribution to income.
Know When To Outsource
Companies will often find themselves too overwhelmed with their core business processes and decide not to take the time to appropriately design, implement and monitor their freight policies and programs. Information is scattered, at best, and decisions are left up to multiple individuals and locations where carrier usage varies from one day to the next. Just like some businesses thrive in a specific niche market due to a certain capability and/or expertise, so do 3PLs and carriers in their respective industries.
If you have more on your plate than you can handle already, then it may be time to bring in an expert to help with your freight management. With the consolidation of data and freight payment & audit services, employing a 3PL can streamline administrative and operational functions and provide you with valuable insight into your operations that can ultimately prove to be invaluable all the way around. You’ll have the ability to analyze areas where there’s room for improvement with a plethora of data, and the existing relationships a 3PL has leveraged within the industry over years can help give you a real advantage.
It’s not always wise to sacrifice service for price. Sometimes spending a little more up front yields larger dividends in the end. The old adage “You have to spend money to make money” definitely applies here.