Strategies for Lowering Freight Costs: Expert Tips from Connect Global Logistics

For shipping companies, cutting costs and exploring methods to reduce freight expenses are constant priorities. It's essential to realize that solely pursuing the lowest LTL and FTL rates isn't always sustainable. A comprehensive approach, considering labor, freight costs, processes, and technology, is vital for lasting cost reduction.

Strategies for Lowering Freight Costs

Connect Global Logistics, a renowned third-party logistics (3PL) provider, boasts decades of experience assisting businesses like yours in optimizing their shipping operations. Below, we present eight effective tips to help reduce freight costs, which go beyond simply searching for the lowest shipping rates for individual shipments.

1. Consolidate and Build Relationships with Your Carriers

Streamlining the number of carriers you work with can potentially boost your profit margins. One approach is to analyze your freight patterns by lanes and shipment types, inviting several carriers to bid on them. Additionally, fostering relationships with select carriers can lead to cost savings, as higher volume per carrier often results in lower freight costs. Carriers tend to value and reward consistent business.

Partnering with a non-asset based 3PL, like Connect Global Logistics, can offer an impartial perspective in negotiating competitive freight rates through their extensive network of carriers, tailored to your specific requirements.

2. Familiarize Yourself with Shipping and Logistics Services

Understanding the array of freight solutions available is essential for cost-effective shipping. Whether it's leveraging less-than-truckload (LTL) shipping for smaller shipments or consolidating multiple shipments into full truckload (FTL) deliveries, knowing your options can lead to significant savings. Collaborating with a 3PL provides access to expert advice on selecting the most suitable freight services for your cargo.

3. Navigate Accessorial Fees

Accessorial fees, though sometimes unexpected, are legitimate charges that can impact your shipping budget. Common fees include liftgate charges, inside pickup or delivery fees, and fuel surcharges. While disputing unjustified fees is an option, it's crucial to anticipate and plan for these costs. Working with a 3PL can help develop strategies to mitigate accessorial fees and discern when they are necessary.

4. Minimize Rush Shipping

While expedited shipping may be necessary on occasion, relying excessively on this option can strain your budget. Rush shipments often come at a premium, sometimes costing two to three times more than standard delivery. Evaluating why rush shipping is frequently utilized and optimizing lead times and internal processes can help reduce reliance on expedited services.

5. Optimize Off-Peak Shipping

When feasible, scheduling shipments during off-peak times can yield cost savings. Shipping outside of regular business hours or during weekends can result in lower freight rates due to reduced demand. Capitalizing on these opportunities can help minimize shipping expenses.

6. Conduct Freight Bill Audits

A thorough review of freight invoices can uncover areas for cost optimization. Analyzing shipping strategies, class and rate accuracy, and the necessity of additional services can identify potential savings. Engaging a 3PL to conduct freight bill audits ensures accurate billing and provides insights into optimizing shipping costs.

7. Implement a Transportation Management System (TMS)

Utilizing a TMS streamlines shipping processes and enhances efficiency. From obtaining freight quotes to tracking shipments and managing invoices, a robust TMS offers comprehensive shipping management capabilities. Partnering with a leading 3PL grants access to advanced TMS platforms and expert guidance on leveraging technology to reduce freight costs.

8. Collaborate with a 3PL for Cost Savings

Working alongside a 3PL offers numerous benefits for lowering freight expenses. From securing competitive rates and ensuring consistent capacity to gaining visibility and reporting insights, a 3PL partnership facilitates cost-effective shipping strategies tailored to your business needs.

Connect Global Logistics, provides a comprehensive suite of shipping solutions and expert support to help you optimize your logistics and reduce freight costs. Contact us today to discover how Connect Global Logistics can transform your shipping operations and drive cost savings for your business.