Cost-cutting is usually the last remedy of choice for downward-trending profits. However, there’s nothing wrong with cutting your expenses if you can increase your profit without compromising your operation’s integrity.
If you want to cut your logistics costs, you actually have more opportunities than you think! Consider these nine ways to polish your freight operations without resulting in a poorly operating logistics system:
Ship at Off-Peak Times
Schedule your freight late in the day and at the beginning of the week. Most carriers have lower rates during these times to attract cost-conscious business owners. They also do this to optimize their business.
Negotiate With High-Volume Carriers If Possible
In most cases, if you can provide guaranteed volumes to carriers, they will offer locked-in contracts that entail better terms and pricing.
Terminate Contracts With Low-Volume Carriers
If you can scale your business and meet the volume in the latter suggestion, always cut ties with your old partners. If you need Less-Than-Truckload Freight (LTL) to deliver some of your goods, just choose your new 3PL to maintain a simple point of contact.
Find Ways to Reduce Dunnage
Reduce dunnage by finding lighter but more robust materials. Remember that carriers will charge everything by weight. When your dunnage is heavy, that’s an extra cost for you.
Pack Pallets Smarter
Strategically packing your goods will consolidate your space, allowing you to optimize the back of a trailer.
Cut LTL if Possible
If your business has grown substantially, it’s best to refrain from using LTL services as they cost more. Strategize where you only need to ship in bulk using truckload freight.
See if Fixed-Rate Shipping Works for You
Variable rates may sometimes cost more than you think. If you can purchase space instead of paying for the type of good you send or by weight, give it a try.
Explore Smaller Shippers
Smaller companies usually have lower rates but do not have the resource. You can try and work out a deal to provide you with logistics services for emergency freights and the likes.
Arrange Backhouling With Your Carriers
Sometimes, backhauling is often an ignored option. Carriers love to avoid dead load shipments at all costs. They will allow shippers to pay less whenever they find themselves in that situation. Talk to your 3PL, and tell them that you are willing to utilize that opportunity.
