One of the biggest expenses for small to medium businesses is shipping costs. How can you find ways to trim costs, or at the least, make sure you are getting the best shipping rates? Are you relying exclusively on one carrier? Are you shipping more frequently than you really need to? We’ve put together 5 tricks for getting the best shipping rates to help save money, control your costs and ship more efficiently.
5. Consolidate Your Shipments
Many small and medium-sized business owners or managers who are shipping for the first-time often ship multiple shipments to and from the same location within a short period of time. However, combining weekly or bi-weekly shipments can save you money and is easier on your supply chain in terms of packaging and tracking. When you consolidate your shipments, you no longer have to endure the headache of packaging and tracking 10 separate shipments.
Another trick to consider is stacking boxes together on one pallet. This is a common and popular best practice for consolidating shipments. For example, stack and shrink wrap 10 similar-sized boxes onto a single pallet. Now, your freight shipment is easier to load and unload from a truck, and it takes up less space. You can get more information on packaging practices and materials by downloading our Guide to Freight Packaging.
4. Understand Carriers’ Supply and Demand
Carriers need to fulfill their capacity and optimize the space inside their freight trucks on the road. Carriers charge different rates for different lanes depending on how badly they need to fulfill capacity. There are a few common trucking terms that will come in handy when looking for the most affordable, practical lane for your shipment. These terms are deadhead, backhaul, and headhaul.
- Deadhead refers to when a truck driver is returning with empty trailers. This is what carriers see as a monetary burden, wasting gas mileage on trucks that aren’t fully filled up.
- Backhaul lanes are return trips to the point of origin for a truck. These lanes are necessary to carriers. They are a little trickier for them to fulfill, so they often offer discounted rates.
- Headhaul lanes are closer to where the carriers themselves are located which make for quick capacity fulfillments.
3. Get the Right Insurance Coverage
It doesn’t matter how great of a rate you get if your cargo is damaged, and there isn’t any additional coverage for it. Understanding the costs of providing certain safety nets in the event of freight damage can help you control your freight spend. Your cargo is precious and so is your money. Make sure you know the difference between limited liability coverage and additional freight insurance.
Legally, carriers must provide limited liability coverage as default protection policies. These carrier-provided limited liability policies may not cover the full value of your shipment in the event of damage or loss. However, there is also additional freight insurance which provides greater scopes of coverage available.
Purchasing additional coverage protects your shipment above and beyond the carrier’s default protection policy. These independent policies can offer protection for the full value of your shipment and remove the need of proving liability if any damage or loss of shipment occurs. While many types of freight are covered fully, it’s important to make sure your specific freight is covered under the additional coverage policy you are considering. For example, some independent policies do not offer coverage for fresh foods, laptop and tablet computers, jewelry and precious stones and more. You always want to make sure your item is eligible for coverage.
2. Leverage a Powerful TMS
Finding the right carrier, lane, and the most affordable rates can be time-consuming for the any shipper. You’d have to go to each carrier directly, compare their quotes, see what lane they would take, communicate and coordinate between multiple parties yourself. There’s an easier way.
A TMS, or transportation management system, is a software solution commonly found within third-party logistics companies (3PLs) that essentially centralizes your search for carriers, lanes, and rates all based on your shipment’s details and information, so you can easily compare different options.
A TMS is essential to your business because it saves time and money. A strong TMS offers deep business insights, such as uncovering inefficiencies and gives you the ability to track multiple shipments at the same time. Paperwork, like the Bill of Lading (BOL), is also centralized in the TMS for easy management. Freight is in the digital age, so embracing these software platforms and technologies is key to finding the best shipping rates quickly and easily.
1. Partner with a 3PL
The #1 trick for getting the best shipping rates is partnering with a 3PL to optimize your supply chain. 3PLs like FreightCenter have expert shipping agents who specialize in finding personalized solutions to meet your freight needs, and they guide you step by step through the often-challenging shipping process. From guidance on your shipping questions to consolidating shipments, information about the best type of insurance, and finding the right lanes and rates through our TMS, FreightCenter is here to make shipping easy and affordable.