Reducing Manufacturer’s Shipping Costs
By Kristi Yokley | Posted on May 27th, 2019 | General Trucking
Many businesses get in the habit of things being done a certain way and that is what they continue to expect. For example, paying fixed rates for shipping when there are other options. Manufacturers must know how to challenge the common beliefs and figure out how to reduce the shipping costs. There are multiple strategies which can benefit your company.
By doing your research and figuring out better ways to ship, you can save as much as 50% of your overall charges. Since the cost of goods and shipping seem to only go up, operational expenses are exploding. You have to get creative and look for new ways to save money to keep your business afloat.
Let’s take a look at several strategies to reduce shipping costs.
Strategy #1: Consolidate Freight Shipments
One of the best ways to cut overall costs is by limiting the number of shipments you pay for. One of the largest budget busters for any company is paying for inbound supplies. You can consolidate those inbound supplies with other shipments. Join up with other businesses and share the costs.
Call the local Chamber of Commerce to find other businesses in your industry. These businesses may also benefit from reducing overall shipping costs by combining shipments. By consolidating your shipments, everybody wins and you save a big chunk of money.
Strategy #2: Find Steady Lane Volume
There is nothing the freight company likes more than to be able to link money by running the same route. You can help your carrier be more efficient. They work with you on a regular basis, can make deliveries within the same lane, thus building out the overall network.
For example, if the carrier is going to make deliveries in your area, he knows it is a reliable freight volume. Since you are not the only one who needs freight moved, you will save up to 12% on your shipping costs. This lets you build a relationship with the carrier and other companies by sharing the same lanes and cutting costs for everyone.
Strategy #3: Choose Different Shipping Times
One big factor that impacts the cost of shipping is the time and day you choose to do it. When it is possible choose a timeframe which is not considered a peak delivery window. You will pay more during these peak shipping periods. Space is limited and everyone is fighting the same timeslot.
The peak time is associated with normal business hours. Anytime between 6 AM and 5 PM are when most businesses are open and are expecting deliveries or shipping products. Most carriers will charge a lot less for deliveries and pickups made outside of those times. This can save up to 10% on your overall shipping costs.
Strategy #4: Load Quicker!
Another factor that goes into pricing of the load is the expectation of how long it will take the product to be loaded. Most carriers will expect a two-hour load window and write that into the price. Carriers nor their drivers like to sit around and wait. It costs them money, especially the driver who gets paid per mile.
Overtime, you can change your reputation by loading quicker. If the carrier knows you can get the job done in an hour or less, that will save you some money. There is no doubt any shipper who is efficient will save the carrier money. That means many carriers will want to work with you. Most carriers charge $25 per hour of waiting.
Strategy #5: Less is More
One of the best ways to save money is by convincing customers to take larger orders. In fact, you can save up to 50%. The reason why is it is cheaper for you to ship out seven pallets of product at once than to deal with a smaller load of three pallets every few days. Some retailers do not realize these savings.
In fact, most retailers will never order more than what they need at any given time. If you can offer certain incentives for the customer to take product more at once, everyone will win. This is especially true if you share the savings with the retailer by letting them in your plans to ship more.
All these strategies listed above, and many more not mentioned, is why Secrest Direct, a Landstar Agent is one of the leading carriers in the country. Not only do we help our clients save money, we offer safe, on-time delivery. Give us a call today to learn more.
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