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. 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. Because most fuel surcharges favor the carrier, in the long run, work to get as close as possible to the carriers' actual fuel consumption and real cost of fuel. It will save you money.
4. Use systems to eliminate administrative work. Too much time is spent tendering loads and paying freight bills. This is work a system should be doing. Cutting administration is another way you can 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.
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. Because most fuel surcharges favor the carrier, in the long run, work to get as close as possible to the carriers' actual fuel consumption and real cost of fuel. It will save you money.
4. Use systems to eliminate administrative work. Too much time is spent tendering loads and paying freight bills. This is work a system should be doing. Cutting administration is another way you can 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.
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 work with companies such as Procter and Gamble and BP and many other Fortune 50 companies. They can help you reduce freight rates and save money.
