10 ways to reduce truckload freight rates and save money-Part 1
January 14th, 2009. Published under Business. No Comments.
Reducing freight rates is a key way of saving money in the industry. We are going to look at the top ten ways to accomplish this goal. In part 1 of a two part series, we will look at this specific concern in the shipping industry and find the best way to reduce freight rates.
1. By eliminating costs for the carrier you can share the savings. Procter and Gamble implemented this concept with the end result of reducing freight rates. P & G eliminated long unloading times by providing its customers an incentive if truck unloading was turned around in two hours. They did and it was a win-win for everyone. They shared the cost savings and everyone benefited.
2. Xerox eliminated deadhead miles and carriers rewarded them with low per-mile rates. How did they do it? They used an old trick started in the 1980’s called continuous moves.
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. Use software technology whenever possible. It can do away with the administrative work that takes a lot of time. And administrative time is a hidden part of the total freight rate. Eliminating administration can therefore reduce freight rates.
5. Routing and consolidation are other administrative tasks that can be handled well with systems. Doing this manually no longer makes sense. Systems can handle this much more efficiently. They can both reduce time and save on 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.