how to reduce shipping cost
Freight shipping cost-cutting is generally seen as a last resort to help reverse profits that are trending downward. But if there’s fat to trim, freight cost-cutting offers perfectly viable opportunities to increase the bottom line.

When it comes to freight charges, you might have more opportunities than you realize! Reassessing how you’re managing freight shipping cost could shed light on more cost-efficient ways to improve profits, without complicating logistics. Take a look at these 10 ways to cut unnecessary costs in your freight operations without hampering your logistics:

Best Ways to Reduce Freight Costs

1. Use Off-Times

If possible, try to negotiate shipping at off-peak times. This may include scheduling freight late in the day or early in the week. Many carriers reserve lower rates during off-peak times to attract cost-conscious shippers as a way to keep business more consistent.

2. Negotiate

Negotiate attractive rates with high-volume carriers or ongoing freight partners. Sometimes, guaranteed volumes or locked-in rate contracts can garner better rates and more appealing terms. These contracts are often mutually beneficial for cost control.

3. Carrier Consolidation

In the same vein as contract negotiations, carrier consolidation is a good cost-saving measure. Terminating contracts with low-volume carriers and consolidating operations into a few larger partners can release you of unfavorable contracts, while also setting you up for more attractive rates and terms.

4. Smarter Packing

In addition to reducing dunnage, try to pack pallets smarter. Identifying smarter packing strategies will consolidate your space, affording you better utilization in the back of a trailer. Aim for tonnage, not dunnage!

5. Less than load (LTL) Shipments

Reducing less-than-load (LTL) shipments is one of the biggest ways to reduce overall freight costs. Ship full loads or partner with carriers that offer load consolidation to avoid eating the cost of an LTL trip.

6. Fixed Rate Shipping

Explore fixed-rate shipping. In some cases, the variable rates you pay may inflate your costs, whereas fixed-rate shipping can provide consistency and predictability. Purchasing space instead of paying for the cost of goods is an alternative option that may cut costs.

7. Robust Logistics

Invest in better freight logistics to see where you might be better off expediting or delaying your freight. A robust logistics plan can help you identify case-by-case variables that raise or lower your freight costs, allowing you to make adjustments that bring your costs down.

8. Smaller Shippers

Reach out to smaller shippers on load boards, who may have the capabilities to transport your freight at much cheap shipping rates than institutional carriers. Freelancers or contract LTL shippers may get you a lower rate in a pinch.

9. Reduce Dunnage

For cost cutting on a per-load basis, see if there’s way to reduce dunnage. Every piece of dunnage you ship comes with its own weight and space demands. That’s the dead cost for you! You can even ask carriers for strategies to reduce dunnage!

10. Coordination

Coordinate with your freight carrier partners to arrange backhauling where possible. Carriers love being able to avoid dead-load shipments! They’ll often accept backhaul for the cost of fuel, driver pay, and a small premium — for a cost that’s well below most average shipping rates.

11. Automated Auditing Tools

To find billing problems, overcharges, and anomalies in shipping invoices, implement a thorough freight audit procedure. By incorporating   freight audit services you know that you are only paying for the services you have actually received by using automated auditing tools to highlight inconsistencies.

12. Analyze

Analyze freight cost data often to spot trends and potential areas for improvement. Create key performance indicators (KPIs) to monitor development and gauge the efficiency of initiatives being put into practice. Over time, consistent cost-reduction efforts will lead to continuous improvement.

Freight costs are only going up. Finding ways to cut costs and trim the fat without compromising your shipping operations means getting creative in how you understand costs. Look at variables as big as the supply chain itself, right down to granular details like how you’re packing pallets. Once you understand your costs, you’ll know how to attack them.

How do you cut costs and optimize without hindering your operations or limiting your options? It takes an entire suite of robust resources — resources nVision Global can provide. We help customers cut costs, minimize mistakes, and optimize operations to stay relevant in the supply chain industry.