We are all operating in a whole new environment these days. Staying stable and focusing on business continuity are undoubtedly high on most businesses list, so now, more than ever, controlling your shipping costs and getting the best freight shipping rate are vital. But where do you start?
To help, we’ve compiled a handy list to give you a better idea of what to keep in mind to optimize the process and ensure that you always get the best freight shipping rate.
How to Save Money on Shipping and Get the Best Shipping Rate
10. Consolidate Shipping
Do you ship to and from the same location on a regular basis? If so, consider consolidating your shipments into larger, less frequent shipments whenever possible.
Our in-depth analysis of thousands of shipments shows that the average shipper can save up to 90%—on average—by consolidating their shipments.
This can be done by stacking boxes together on one pallet. For example, stacking and shrink wrapping 10 similar-sized boxes onto a single pallet (rather than shipping them individually) has great benefits. You will save money on shipping costs, and you will save time by only needing to track one shipment rather than the usual ten.
9. Understand Carrier Lanes (Freight Route Imbalances)
Carrier lanes, or freight route imbalances, impact the rate you will pay for your shipment. The two most commonly used terms, headhaul and backhaul, refer to the leg of the trip, and understanding each term is important in getting the best shipping rate.
- Headhaul refers to the initial shipment or the order that gets the truck on the road in the first place. Carriers charge a premium for headhaul because they don’t have any other business in the headhaul lane. Their other trucks are often already full.
- Backhaul lane is cargo that is shipped on the return trip. No carrier wants to be paying for an empty trailer, so backhaul rates are typically significantly discounted.
8. Understand Carrier Liability
Recently, a customer came to FreightCenter after their current carrier paid them only $200 when a shipment valued at $10,000 was damaged during transit. Their unhappiness was understandable and also avoidable. The client didn’t fully understand the carrier’s liability coverage, and therefore, the client didn’t get the necessary additional freight insurance.
A 3PL (third party logistics company) can help shippers understand their liability coverage needs. 3PLs understand the specific limitations of each carrier’s limited liability policy and will make recommendations to add additional insurance through a licensed insurance company to ensure the proper value of an item is covered. Freight damage is common during transit due to frequent stops, loading and unloading. Therefore, having proper insurance coverage is an important part of the equation.
7. Selecting the Best Carrier for Your Route
Regional or national carrier? It’s important to realize that individual carriers are priced differently, depending on where you are shipping to or from. Carriers transport freight similarly to how airlines transport people. Each carrier has their own hubs and routes (known as "lanes"). Just as airfares can fluctuate greatly based on the placement of their hubs and the routes between them, so can carrier rates.
Certain carriers are excellent national freight carriers and are great choices for long, cross-country hauls. On the other hand, regional carriers are better for shorter, regional shipments. Often, they are faster and less expensive for shipments that are going a short distance.
6. Minimize Empty Space on a Pallet
Reducing the freight class and minimizing oversize fees on your shipment are two simple ways to save money. To get the freight class as low as possible, make sure the pallet is packed to be as dense as it can be and with no empty space. Tightly pack the pallet edge to edge, but do not exceed the footprint of the pallet.
Also, avoid exceeding 60 inches in height whenever possible. Eliminate the unpleasant surprise of getting any additional freight charges by making sure the height of your shipment doesn’t go over 60 inches – that’s when oversize fees kick in.
5. Stackable Is the Trick
It is not uncommon for shippers to place a pyramid or something similar on top of a pallet. That prevents the carrier from stacking another item on top and the carrier will label the freight as being “non-stackable”.
This interferes with trailer volume efficiency and requires the carrier to use additional space for the shipment, often resulting in the shipper paying for both spaces. Make sure you leave your shipment stackable.
4. Spot Pricing Vs. Shipping Rates
There are times when additional discounts can be found. For example, if your shipment is taking up more than 6 pallet spaces and weighs more than 5,000lbs, your 3PL can often check its carrier network to see if a carrier is willing to offer a one-time special rate for your shipment. This is what is referred to as a spot rate, and it’s based on the carrier’s available capacity.
3. Understanding Carriers’ Rules Tariffs
Most carriers have huge and complex books outlining all hidden fees and rules that could affect your shipping costs. This is called their Rules Tariff. There are several factors that can influence these fees. For example, some zip codes have additional pickup or delivery fees and locational surcharges, such as residential fees or limited access charges. Cities with heavy traffic, such as Chicago or New York city, have additional fees due to vehicle congestion. These fees can be as high as $300!
Again, working with a 3PL helps clients to better understand these hidden fees by comparing them side-by-side.
2. Net Cost Vs Line-Haul Rate
When you compare different freight carrier shipping rates and try to find the lowest rate, you might look just at the Line Haul Rates and not any additional fees such as fuel surcharge and carrier rules fees as discussed in #3 above.
Discounts can be very misleading. The Line Haul Rates vary greatly from one carrier to another. It is not uncommon for a freight carrier that gives a 60% off their Line Haul rate to be substantially less than a carrier offering an 85% discount.
Once again, having a partner or 3PL can remove the complexity and can help you look at the Net Cost versus the Line Haul rate. When you get a quote, you can see the Net Cost of one carrier versus another.
1. Work with a Third-Party Logistics Provider (3PL)
Leverage the expertise and powerful technology that 3PLs have at their fingertips. Selecting the best option for your shipment can be complicated. Most 3PLs have access to TMS software that can not only find the best rates but can compare the pros and cons of each carrier.
As a 3PL, we have access to the best shipping rates and can help you navigate all of the complicated questions that can be associated with freight shipping. Don’t go it alone - ask the experts! We help our clients find the best carrier to match their needs and budget.