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3PL Outsourcing, Freight Transportation, Reduce logistics costs

How to Reduce Freight Costs AND Attract Truck Freight Capacity

Kane Logistics | December 09, 2021

The current freight capacity crunch has not been kind to corporate freight budgets. But a capacity-at-any-cost strategy is not sustainable – even in the short term. It’s why we went back and updated our idea log on freight cost reduction strategies. Check out our 13 Strategies to Reduce Freight Costs.

But let’s face it, in the current freight environment it’s more about supply than demand. Some of these same freight savings strategies can help secure the capacity you desperately need. Here are a few ideas.

Contract steady lane volume

#55-Trucks-inline-frontview-cropIf a carrier knows you’re going to give it a steady flow of freight in the same lane, it can market those backhauls and build a more efficient freight network. As a result, you’ll pay less. But in today’s seller’s market for freight, these carriers can choose the shippers they work with. Example: At one point in Q3 2021, there were 11 available loads for every truck in the Northeast region. Right now, these carriers are directing their available capacity toward loyal, long-term partners.

Ship on off-peak days

In a normal environment, this flexible freight strategy can save you 10% versus shipping on peak days. That’s not the case right now with capacity so tight. But shipping a day later or earlier can increase the chances of getting your load covered. Friday is typically an off-peak day since shippers of CPG products try to get their goods to stores on Thursday in time for weekend shopping. Mondays also tend to be a low-volume day. So ship off-peak to get access to more freight capacity.

Stop doing annual RFPs

So many shippers feel like the best freight savings strategy is to put all their lanes out to bid each year, often cycling through many different carriers in the process. This is the freight equivalent of speed dating. And guess what? It doesn’t work. Serial rate shoppers are now paying far more on the spot market than they would be had they established long-term contracts with a dedicated freight carrier. And worse, they are really struggling to get loads covered. (What’s the expression? “The chickens have come home to roost.”) Longer-term contracts let carriers mine for other customers to create more efficient freight networks, enabling them to offer you better rates. And obviously these contracts lock in freight capacity. It’s a win-win. Most good strategies are.

Load and unload quickly

Your ability to get a carrier in and out of your facility quickly affects your rates. Carriers may add about $80 for each hour of delayed loading or unloading. If you’ve developed a reputation for delaying trucks, carriers may actually factor that added time into their rate so they don’t have to chase after you for accessorial charges. But these days, frankly, carriers are more likely to simply drop you as a customer. There’s just too much money to be made elsewhere to risk sitting in a yard waiting for you to open up a dock door.

Offer afternoon and night pick-ups

By offering later pick up times, you give carriers an opportunity to make your load a backhaul run after a morning delivery. This could save you 15–20% off standard rates. More importantly, it opens up that trip to a lot more carriers. If the pickup was at noon, for instance, they could not consider bidding because they’d still be finishing up their morning deliveries.

Strategies that reduce freight costs and improve available freight capacity are not mutually exclusive. Examine your own operations to see if any of these ideas could work for you. And, if you’re looking for reliable dedicated capacity in the Northeast, let’s talk.