Shippers often work under the assumption that the way they ship freight (and the associated costs) are pretty much fixed and can’t change. But just because “it’s always been done this way” doesn’t mean you shouldn’t challenge the status quo. At Kane Logistics, we’ve identified a ton of ways to reduce freight costs, with changes you can begin implementing today.
Some of them are very simple – such as offering night-time freight pick-ups. A smart approach opens the door to savings that can reach as high as 50% of “business as usual” freight charges. Below are 13 specific suggestions to cut those freight costs, including an estimate of how much you could save.
POTENTIAL SAVINGS: 2-12% versus traditional lane pricing.
POTENTIAL SAVINGS: 10% versus peak ship days.
POTENTIAL SAVINGS: up to 25% versus the cost of unconsolidated loads.
POTENTIAL SAVINGS: 3-5% per year, these savings estimates can easily double when capacity tightens.
POTENTIAL SAVINGS: 5-20%.
POTENTIAL SAVINGS: 1-3% on a per load basis.
POTENTIAL SAVINGS: Depends on your current reputation. You can safely figure a carrier has at least $40 an hour factored into their rates for each hour it typically takes you to live load them.
POTENTIAL SAVINGS: 15-20% off standard rates.
POTENTIAL SAVINGS: up to $150 per pallet space.
POTENTIAL SAVINGS: up to 50% versus the smallest LTL loads, when minimum charges may kick in.
POTENTIAL SAVINGS: 20% versus a non-backhaul rate for that lane.
POTENTIAL SAVINGS: 10% when comparing the total cost of packaging, warehousing and transportation.
POTENTIAL SAVINGS: 3 to 5%. Shippers who own their own fleet of trucks are often paying at least a 25% premium over the typical cost of outsourcing delivery needs to reputable and reliable carriers.
Many of these solutions seem self-evident, and yet shippers often ignore them, and end up paying more for freight than they should. Why? The main culprit is blanket acceptance of “business as usual” rules and processes – between internal departments, and between the shipper and the customer.
See if any of the above suggestions make sense for your business. Then go a step further. Examine your freight program and question every built-in assumption – it has to get there in two days, rail would never work, marketing determines the carton size. Challenge the status quo, and watch the savings, and the appreciation, roll in.