If you’re a shipper you want to cut down on Freight Cost. It’s not rocket science. Cutting costs is part of running a successful business. The tricky part, however, is making sure that these cuts don’t include dropping your level of service. Crappy service means losing customers, which means…well…you get it.
At FreightPros, we may not know the intricacies of your business, but we know the intricacies of ours. Simply put: We know freight, and part of our job is to help YOU know freight. You may never master the Shipping Muse (She is wild and tempestuous), but you don’t need to be an expert to cut down on your freight cost. Just follow these tips!
1. Use a Broker
What can a broker do for you to cut down on freight cost? They can negotiate lower freight rates with the carriers. They can provide inside knowledge of markets and capacity to ensure you’re getting a fair freight quote
. They can give you access to a Transportation Management System that lets you set up shipments on the go. They can track your shipments, fight false invoice charges from the carrier, get you third party freight insurance for your fragile shipments, and get you custom BOLs to cut down on the chances of a reclass or reweigh. They can do it all, and if you’re serious about your shipping, you should work with a freight broker.
2. Keep Your Commercial Invoices & Records
With a broker or without one, if you ship enough you’ll accrue in-transit additional charges. The most common of these charges are reweighs and reclasses, and to fight them with the carrier, you’ll need records of the items. These records will need to have official weights and dimensions of the item being shipped. If it’s something you’ve bought, keep the receipt. If you’re the manufacturer, make sure you have some record of the item’s specs. Completely avoiding reclasses and reweighs is impossible, but if you have the correct paperwork, you can fight those additional charges. Getting these charges off your shipping bill will keep your freight cost low.
3. Consolidate Shipments
Whenever possible, it’s best to consolidate your shipments. This practice helps cut freight costs in two ways. First, when you consolidate your shipments, you lower the chance of lost freight. It’s easier to lose 1 out of 10 loose boxes than it is to lose 1 pallet with 10 boxes on it. The same theory applies to shipments. Second, shipping in bulk cuts down on ancillary costs like gas prices or unused truck space. It will still cost more to ship two pallets than one, but it will likely be cheaper than shipping two pallets in two separate shipments.
4. Get Insurance Freight insurance
depends on the value of your shipment, but if its the right choice for your freight it can save you serious cash. When you’re shipping freight, LTL or otherwise, you’re going to have to face the risk of damage or loss. Carriers carry their own insurance, but sometimes it’s less than the value of the shipment. If you’re shipping anything valuable or fragile via LTL, you should get third party insurance. Truckload shipping is different. Good brokers only work with carriers that have a minimum amount of coverage (usually around $100,000), so make sure you’re working with a broker that thoroughly vets the carriers they partner with.
5. Consider Interline
Utilizing interline is a great way to cut your freight cost if your shipment is not time sensitive. Interline is the practice of combining truck and rail freight
, and though its not available for all shipments, it can save you some serious cash. The drawback to interlining your shipment is the time factor. Interline shipments take longer than a standard LTL or truckload shipment. That being said, if time is not a factor and you’re looking for the cheapest way to move your freight, ask your broker if interlining is an option for your next shipment.
6. Ask About FAKs
If you’re not a regular shipper, you’ve probably never heard of a “Freight of All Kinds,”
agreement (or FAK for short). FAKs are an agreement between carrier and shipper that can cut down on freight costs by bundling services such as liftgates or freight class rates. You’ll need a broker to negotiate any FAK, and you’ll need to be shipping some major volume to make it worthwhile for the carrier, but if you’re a high volume shipper you should ask your broker if FAKs are an option for your freight. They can simplify your shipping game, and save you money in the process.
7. Confirm Freight Class Freight class
is a huge part of freight rates, and unfortunately, it has a tendency to change. The LTL industry as a whole is slowly moving away from NMFC codes and towards density-based classing, but you’ll still find a large amount of traditional freight classes designated by NMFC. It’s hard to keep up with changes in freight class, so it’s important to confirm your item’s freight class with your broker once a month or so. A good broker will have access to the classing database, and will be able to see if your shipment is good to go. Avoiding reclasses is always a fine way to cut freight cost. And if you’re shipping truckload? Well, you don’t need to worry about freight class. It’s not a factor in full truckload shipping.
8. Package Shipments Properly
This is perhaps the easiest way to cut down your freight cost. Improper packaging results in numerous damages and loss, both for LTL and truckload. Freight shipments need to be boxed and palleted. The shipments will be moved on and off docks and trucks with forklifts, stacked and unstacked. Recognize how much your shipment will be handled, and plan accordingly. Pack with plastic, packing peanuts, tape and newspaper, etc. The more packing the better. As long as there is freight shipping there will be damage, but shipments that are packed properly will cut down on your chance of dealing with damage or loss.