5 Strategic Ways to Save on Freight Costs for Retail Businesses
Efficiently maximizing profits entails the reduction of costs without compromising the quality of your products and services. There is one way to do this without laying off workers or operating with minimal resources, and this is achievable with being able to reduce your freight costs.
Many business owners are under the assumption that there is no way to cut high shipping costs because “that’s the way things are done,” but we’re here to tell you that’s not the case. We’ve gathered the five best strategies to reduce freight costs, so continue reading if you want to know.
1. Commit to a carrier and develop a good relationship with them
This might be contrary to what you’ve heard or read before, but sticking with an excellent freight transport company for two or more years is better than “carrier hopping.” A more extended contract allows carriers to strategize and generate transportation advantages that will benefit both your carrier and your business.
For example, other customers around your area can be mined. This reduces deadhead miles and creates a more efficient delivery network. Additionally, most long-term contracts have locked rates, while others suffer from price hikes and inflation rates.
2. Increase delivery lead times
GIving your carriers an early notice on deliveries allows optimization of assets such as trucks, drivers, and storage space. It’s as simple as giving them ample time to plan and prepare for multiple deliveries within a day. Poorly designed delivery routes result in trailers waiting idly in another company’s warehouse, which aren’t free of charge. Not only is your money wasted, but production and sales can also be affected. Making plans with your carrier improves the overall efficiency of your supply chain.
3. Consolidate shipments
Combining your LTL shipments with nearby businesses with the same mass retailer can let you save up to 25% versus the price of unconsolidated loads. It might cost more in terms of transportation time. However, with savings like that, consolidation is worth it. You can find the right shipping partners in your local Chambers of Commerce or by working with third-party logistics offering a freight consolidation program.
4. Set a shipment volume
Many customers tend to order small batches frequently to reduce storage costs. In turn, this becomes a costly transaction for your business. To avoid this, negotiate a set shipment volume with your customer. Convince them by offering incentives such as sharing freight savings or agreeing to a Vendor Managed Inventory.
5. Avoid peak shipment days and hours
Some carriers have fluctuating shipping rates based on the volume of shipments they have.
Avoid the crowd and go for off-peak days such as Fridays and Mondays. You can even offer pick-up at unconventional hours, such as the night shift. It may help you snag a cheaper shipping rate since your carrier’s backhauls can be filled in. Additionally, there are fewer chances of having a conflicting schedule with another customer.
Shipping is an essential part of any business, but it doesn’t have to be expensive. Don’t be afraid to break the norms in the industry and take charge of your shipping options. It might take more effort than going with the flow, but the savings are worth it.
If you’re in North Brisbane, give us a call and check out our express freight services solutions in South East Queensland.