Freight spend is one of the largest controllable costs in many businesses. These seven strategies consistently lower it without sacrificing service.
Freight spend is one of the largest controllable costs in many businesses. Implementing the right strategies can consistently lower these expenses without sacrificing service quality. Here are seven proven ways to reduce your freight costs:
1) Rate shop every shipment: Carrier rates fluctuate constantly based on lane capacity and market demand. Don't rely on a single carrier. Use a TMS to compare rates across multiple carriers instantly.
2) Correct freight classification: Incorrectly classifying your LTL freight is a quick way to incur costly accessorial charges and rebills. Ensure you're using the correct National Motor Freight Classification (NMFC) code and density calculations.
3) Optimize modes: Sometimes two LTL shipments are cheaper to send as one FTL, or a lightweight pallet might be more cost-effective via parcel. Regularly analyze your shipping data to optimize your mode choices.
4) Audit every invoice: Freight invoices are frequently incorrect. Auditing every invoice ensures you aren't paying for services you didn't request or experiencing rate mismatches.
5) Negotiate with data: Use the data collected by your TMS to negotiate better rates with your carriers. When you know your lane volumes and shipping patterns, you have leverage.
6) Consolidate shipments: Grouping multiple smaller shipments destined for the same region into one larger shipment can drastically reduce costs.
7) Use a logistics partner: Partnering with a logistics expert like Standard Connect gives you access to a broader network, pre-negotiated rates, and the technology needed to execute these strategies flawlessly.