Tips to Lower Freight Shipping Costs

Running a business can be expensive. You have to cover costs related to water, electricity, taxes, employee wages, and more. For many, freight shipping costs account for a more significant portion of their budget, and with evolving and growing companies, this means increasing fees. To help combat the cost of inflation, you could be searching for ways to reduce costs while retaining the same level of company integrity. When you implement some simple changes, you will be able to save money and time.

Know the Available Transportation Options

There are three main ways you can ship your goods, ground with the help of an OTR driver, air, or sea. Many companies find that ocean shipping is more affordable than shipping by air, especially when dealing with international goods.

However, if you have local goods, using the railroads may be more affordable than trucks. Mixing the different modes of transportation can also help reduce costs while improving delivery times.

You can also outsource transportation. This may help you save between three and five percent. Shippers that have a transportation fleet in place will usually pay a 25% premium over the logistic transportation companies. If you plan to outsource, make sure you find a reliable broker and that has a good reputation.

Consolidate the Goods You Offer

Consolidating goods to a single country can help reduce costs by as much as 25% compared to unconsolidated loads. The concept of consolidating loans is actually fairly simple. Your smaller shipments are consolidated into a single, larger shipment. Companies such as Colgate and CVS use consolidation programs to help their bottom line, and you can too.

While consolidating will take more time, it also results in saving money. Customers still receive the same product in a smaller amount. By using this method, you can also reduce your labor costs and keep dock bays open.

Use Smart Cartons, Product Design, and Packaging

Packaging accounts for approximately 10% of every supply chain dollar in your business. Warehousing accounts for 25% and transportation 60%. You should carefully consider the design and package specifications when you are thinking about freight efficiency.

By minimizing the amount of space each of your products takes up, you can get more value when you are shipping.

Ship More, Less Often

Try to get your customers to buy more or buy in bulk. Doing this helps reduce freight costs. Shipping twenty pallets per day is much more efficient than shipping just two pallets every day. You should try to add benefits such as free shipping for orders that exceed a specific dollar amount, which will make buying in bulk worthwhile.

If you work with any type of retailer, the same concept is true. Provide additional incentives for them to place a bulk order. This is going to help you save money and run a more profitable business.

Use a Load Board

A load board will also help reduce business costs. If you have a one-off shipment, find a carrier who can carry the product and backhaul. Most carriers like backhaul because it helps them bring in money for what may be empty miles, otherwise.

If you are shopping around enough, you may even be able to find carriers that will take the shipment for the cost of the fuel and a little more. This may help you save between 20 and 40%. Find the most frequent ship-to areas to find a local carrier and reduce shipping costs. You can also provide later pickup dates, which will increase the possibility of finding a carrier to take the shipment as backhaul.

Effective Ways to Reduce Costs

When it comes to reducing freight-related costs, there are many options to consider. Each of the tips here will help you reduce your costs and help you earn the highest amount of profits possible. This is going to help ensure the ongoing success of your business, regardless of what you ship.