How To Get Lower Freight Rates for LTL & Truckload Shipments
Regardless of whether you are a first time shipper, one-time shipper, or a residual shipper, you’re probably looking for ways to get lower freight rates. Lower costs of shipping increase profit and enable business growth. But finding ways to lower your freight rates isn’t always as easy as just searching Google, “freight quotes.” A responsible shipper of freight must recognize the difference between value and cost in their freight quotes. They must be able to parse through the lingo, the carriers, the accessorials, and even the weather and market capacities; and then emerge with their best available rate, with all of these factors included in the equation.
Freight brokers (at least some kinds of brokers) are about more than just supplying their shippers with the lowest possible rates. There’s a range of freight services that a great broker will enhance for their shippers, including optimum ways to get lower freight rates. Like many things in the freight and shipping industry, there’s no great equation for success. It doesn’t matter if you’re moving freight through LTL, truckload, intermodal, parcel, overnight, expedited, or even air freight; the fact remains that each shipper and shipment is different, and will require different approaches to retain the best possible value and the overall lower freight rates.
The purpose of this blog (and many others like it) is to help YOU get the best freight rates for your shipments. Like most opportunities in freight shipping, a good broker can be a partner that can help you save time and money. Some of these shipping tips you can take care of yourself, others you’ll need assistance from a broker or carrier (if you go direct). As I mentioned previously, there’s no perfect equation for getting the best freight rates. But if you take into account some of this tips, you should be on the right track to getting the most out of your shipping and freight quotes.
Consolidate Your Freight
Instead of shipping all of your freight separately, try to consolidate your freight into as few shipments as possible. You should do this for a few reasons. 1.) This practice lowers the chance your freight will be damaged or lost in transit. Though damage and loss is not common in freight shipping (less common in full truckload shipping than LTL), it does happen. The more items that you ship, the greater your chance of freight damage. Though most LTL carriers do carry insurance, it’s not likely to cover the entirety of your item’s total loss, as well as freight charges accrued. For expensive or fragile items, we encourage our shippers to purchase third party freight insurance, available through your shipping broker. 2.) Consolidated freight takes up less space on the truck, and in LTL shipping the less space a shipment takes up the lower the freight rate is likely to be. Apart from the space of the truck, when you consolidate your freight your shipment will be more dense. Generally speaking, denser items will have a lower freight class. A lower freight class means a lower freight quote. A lower freight quote means you’re saving money on your LTL shipments.
Understand Your Freight Class
We’ve talked a lot about freight class on this blog, and it can be a pain in the butt to constantly make sure you have the correct freight class, or check and see if your freight class has recently changed. All that said; it’s worth it. Incorrect freight class and reclasses are one of the most common types of adding cost to your freight rates. To avoid these costly reclasses it’s important to make sure you’re shipping your freight with the correct freight class. Truckload shipping does not use freight class and therefore it is not a factor in your freight quote if you’re moving full truckload. But if you’re shipping LTL, your freight will have a class, and that class can raise or lower your freight rate. Some shippers will try to move freight under an incorrect class in an effort to lower freight rates. We don’t recommend this tactic. Freight carriers are well versed in fraudulent freight class, and are not easily tricked. Apart from constant reclasses, your carriers can refuse to pick up your freight if they find that you are trying to cheat your freight class. By removing a particular freight carrier from your shipping options you cut down on your ability and your broker’s ability to lower your freight costs.
FAK is a freight term that stands for “Freight of All Kinds.” It is a pricing tool used by brokers and carriers to encourage higher shipping volume through one carrier, and bulk savings on the side of the shipper. FAKs allow shippers that ship high volumes of freight through one particular carrier the opportunity to ship multiple items under a lower freight class, thereby lowering their shipping costs. This is a simplification of the process, and you’ll need to speak with your freight broker to see if your shipping practices are eligible for an FAK, but if you’re shipping high volumes of freight you should get in contact with your broker, and see if an FAK can be negotiated. Carriers want to award high volume shippers for using their services, and they’ll make concessions when it comes to freight classes or services to get more of your business. FAKs can cut your freight rates if you qualify.
Lowering Your Freight Rates
There are many ways to save money on your shipping costs and lower your freight rates. Consolidating your freight, using the correct freight class, and researching freight of all kinds are three practices that you can use to optimize and streamline your freight shipping. Remember to note the difference between value and price in your shipping, they’re not always the same thing. And if you have questions, don’t hesitate to reach out to your freight broker.