Part 2 of our series on reducing freight rates continues. In this article, we review the next five tips that can save you money.
1. Optimize load size - always ship really full trucks (not nominally full loads). Most companies claim to ship full trucks but data obtained from the DOT, weighing more than a quarter of a million empty trucks, showed the median weight capacity is more than 47,000 lbs. Very few companies achieve anything near that weight. There are systems out there for optimizing shipment size and container loading. Procter & Gamble claimed a 7% savings by using a system called AutoVLB from Transportation | Warehouse Optimization.
2. You would never think a company would ship a load unnecessarily. Believe it or not, it happens all the time. Simplifying assumptions often lead to unnecessary or wasteful moves. For example, it is easier to ship from a plant to its outside warehouse and then onto the distribution centers spread around the US. Shipping direct form the plant requires more planning and coordination to get the right mix to the remote DC's. Here is where systems can help - do the planning and bring the few cases of slow moving product to the plant instead of moving the many pallets of materials through the DC.
3. Optimize modes. Conventional tractor-trailer shipments or even inter-modal 53 ft containers are not always the most economical way to ship. Steamship lines are often desperate to get their 40 ft containers back to port. While the load size is diminished, the savings can more than make up for that apparent inefficiency. Shipping even a few containers will reduce freight rates and increase cost savings.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Keep your options open. One way of doing this is to have the right mix of operations. This can include a mix of private fleet, dedicated trucks, capacity, and market (spot) purchases. Use your private fleet for your high service customer deliveries. Dedicated trucks can be more cost-effective, but you still have to keep them on the move, and dedicated capacity offers some guarantee of the number of trucks that you can provide on any day. It offers both shipment security and good supply chain management.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
Test your skills and see how efficient you are at managing costs by loading a truck. Visit www.TransportationOptimization.com. While there, request a call back with one of the premier transportation consultants in the industry from Transportation | Warehouse Optimization. Working for many companies in the top Fortune 50 like Procter & Gamble, Nestle, Kraft, and BP, they understand your unique problems and can help you to solve them. - 15246
1. Optimize load size - always ship really full trucks (not nominally full loads). Most companies claim to ship full trucks but data obtained from the DOT, weighing more than a quarter of a million empty trucks, showed the median weight capacity is more than 47,000 lbs. Very few companies achieve anything near that weight. There are systems out there for optimizing shipment size and container loading. Procter & Gamble claimed a 7% savings by using a system called AutoVLB from Transportation | Warehouse Optimization.
2. You would never think a company would ship a load unnecessarily. Believe it or not, it happens all the time. Simplifying assumptions often lead to unnecessary or wasteful moves. For example, it is easier to ship from a plant to its outside warehouse and then onto the distribution centers spread around the US. Shipping direct form the plant requires more planning and coordination to get the right mix to the remote DC's. Here is where systems can help - do the planning and bring the few cases of slow moving product to the plant instead of moving the many pallets of materials through the DC.
3. Optimize modes. Conventional tractor-trailer shipments or even inter-modal 53 ft containers are not always the most economical way to ship. Steamship lines are often desperate to get their 40 ft containers back to port. While the load size is diminished, the savings can more than make up for that apparent inefficiency. Shipping even a few containers will reduce freight rates and increase cost savings.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Keep your options open. One way of doing this is to have the right mix of operations. This can include a mix of private fleet, dedicated trucks, capacity, and market (spot) purchases. Use your private fleet for your high service customer deliveries. Dedicated trucks can be more cost-effective, but you still have to keep them on the move, and dedicated capacity offers some guarantee of the number of trucks that you can provide on any day. It offers both shipment security and good supply chain management.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
Test your skills and see how efficient you are at managing costs by loading a truck. Visit www.TransportationOptimization.com. While there, request a call back with one of the premier transportation consultants in the industry from Transportation | Warehouse Optimization. Working for many companies in the top Fortune 50 like Procter & Gamble, Nestle, Kraft, and BP, they understand your unique problems and can help you to solve them. - 15246
About the Author:
Tom Moore and his associates at Transportation l Warehouse Optimization will help you reduce freight rates and save you money. Transportation l Warehouse Optimization consults with companies such as P&G and BP and many other CPG companies. They can help you reduce freight rates and save money.
