Saving money is the buzzword in any industry today. That is true in the transportation industry, and a specific concern is the cost of shipping and how to reduce freight rates. In part 1 of a two part series on how to reduce truckload freight rates, we will look at the top 5 of a top ten list of how to save money.
1. Eliminate costs for the carrier and share the savings. It seems obvious: if you save the carrier time and money, you will reap the benefits. For example, Procter & Gamble eliminated the long waits for unloading by providing the customers an incentive to get all trucks turned in two hours. By eliminating hours of hand unloading and counting, carriers turned their equipment faster and had happier drivers. A win for the carriers resulted in a win for P & G and the end result was reduced freight rates.
2. Create continuous moves. In the early 1980's, Xerox started to send trucks on a tour that ultimately ended back at the origin. Xerox paid for every mile driven, and since it was able to keep the trucks loaded, they were rewarded with lower per-mile rates.
3. Fuel surcharges are favoring the carriers at the expense of shippers. The surcharge is based on fuel efficiency (mile per gallon) far lower than the carrier actually achieves. Carriers also pocket the difference between actual fuel costs and the DOT retail price - which may be quite a bit higher.
4. Check out the latest software available to find something that can handle your paper work. This can reduce your freight rates. Too much time is spent paying freight bills or tendering loads. This is work a system should be doing.
5. Another software technology can handle things such as routing and consolidation. Better routing and consolidation is a major contributor to savings for LTL shippers. Time and time again, it has been shown that doing routing and consolidation manually is far from optimal. Better routing and consolidation can save costs and typically reduce freight rates.
Test your skills and see how efficient you are at managing costs by loading a truck or picking pallets in a warehouse. Visit www.TransportationOptimization.com. While there, ask for a call with one of their premier transportation consultants. Working for many companies in the top Fortune 50 like Procter & Gamble and BP, Transportation | Warehouse Optimization understand your unique problems and know how to solve them. - 16069
1. Eliminate costs for the carrier and share the savings. It seems obvious: if you save the carrier time and money, you will reap the benefits. For example, Procter & Gamble eliminated the long waits for unloading by providing the customers an incentive to get all trucks turned in two hours. By eliminating hours of hand unloading and counting, carriers turned their equipment faster and had happier drivers. A win for the carriers resulted in a win for P & G and the end result was reduced freight rates.
2. Create continuous moves. In the early 1980's, Xerox started to send trucks on a tour that ultimately ended back at the origin. Xerox paid for every mile driven, and since it was able to keep the trucks loaded, they were rewarded with lower per-mile rates.
3. Fuel surcharges are favoring the carriers at the expense of shippers. The surcharge is based on fuel efficiency (mile per gallon) far lower than the carrier actually achieves. Carriers also pocket the difference between actual fuel costs and the DOT retail price - which may be quite a bit higher.
4. Check out the latest software available to find something that can handle your paper work. This can reduce your freight rates. Too much time is spent paying freight bills or tendering loads. This is work a system should be doing.
5. Another software technology can handle things such as routing and consolidation. Better routing and consolidation is a major contributor to savings for LTL shippers. Time and time again, it has been shown that doing routing and consolidation manually is far from optimal. Better routing and consolidation can save costs and typically reduce freight rates.
Test your skills and see how efficient you are at managing costs by loading a truck or picking pallets in a warehouse. Visit www.TransportationOptimization.com. While there, ask for a call with one of their premier transportation consultants. Working for many companies in the top Fortune 50 like Procter & Gamble and BP, Transportation | Warehouse Optimization understand your unique problems and know how to solve them. - 16069
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 Procter & Gamble and BP and many other CPG companies. They can help you reduce freight rates and save money.
