Are you looking for ways to keep freight charges affordable? Consider the following suggestions so that freight charges do not take a large share of your company’s revenue.
Several software vendors provide transport management software (TMS) systems. Consider getting a software package that you will allow you to get a real-time update of which freight carrier offers the most competitive terms for a route where you would like to ship goods over. The system can rate different carriers based on their capacity, cargo consolidation opportunities and current rates. You will be able to use the carrier that offers you the most cost-effective terms of delivering cargo to clients.
Renegotiate Accessorial Charges
Many times, the cost of freight goes up by a significant margin because of charges associated with delays to load trucks, like surcharges for less-than-load consignments (shipments that do not reach the minimum quantity that a carrier can profitably transport). These accessorial charges can add up and dent your profits. You can reduce the impact of those additional costs by negotiating with your preferred freight transport company so that there is a cap on how much can be charged for those extras. You can increase your chance of succeeding at those negotiations if you first build a business relationship with the freight company for several months. The figures of the volumes that you ship and the freight payments that you have made will help to make your request for a standard accessorial rate more convincing.
Consider Alternate Modes
Take a critical look at the modes that you have been using to move freight to your clients. Explore other modes that can be incorporated into your freight transportation options. For instance, it may be more affordable to transport goods by rail in case such a mode is available in your area of interest. You can also consider inter-modal transportation of the same consignment if that yields a cost saving. For example, the cargo can initially be moved by rail before it is transferred to a truck that will deliver it to the final destination. The freight transporter can help you to find ways to be more efficient in freight transportation.
Develop a habit of periodically reviewing your freight transportation systems and costs. That review will help you to keep tabs on how well you are managing freight costs. That review will also challenge you to find additional ways that you can employ to adjust those aspects that are causing freight costs to creep up. For instance, you may discover that you dispatch less-than-load consignments frequently. A remedial plan may include negotiating with a small carrier so that those consignments are consolidated with other shipments.