How to save money in these economical times is the goal of any transportation manager in industry today. In the first part of our two part series, we are going to closely look at the ten ways in which you can reduce freight rates and save money. In this article, we will look at the top 5.
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. Continuous moves, an old trick started in the 1980's by Xerox is another way to reduce freight rates. By practically eliminating what is called deadhead miles, the carriers rewarded them with low per-mile rates.
3. Rationalize fuel surcharges. Carriers generally overcharge shippers. Carriers make money on the difference between the actual fuel consumption that they achieve and the rate they put in the contract language. They also make money on the difference between the retail diesel prices in the index that the DOT reports and the discounted rates they actually pay.
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. 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.
When you consider a Transportation consultant, Transportation | Warehouse Optimization has been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view, know the market place and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. Ask for a free consultation. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings.
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. Continuous moves, an old trick started in the 1980's by Xerox is another way to reduce freight rates. By practically eliminating what is called deadhead miles, the carriers rewarded them with low per-mile rates.
3. Rationalize fuel surcharges. Carriers generally overcharge shippers. Carriers make money on the difference between the actual fuel consumption that they achieve and the rate they put in the contract language. They also make money on the difference between the retail diesel prices in the index that the DOT reports and the discounted rates they actually pay.
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. 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.
When you consider a Transportation consultant, Transportation | Warehouse Optimization has been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view, know the market place and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. Ask for a free consultation. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings.
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.
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