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. 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. 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 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. Perform routing and consolidation. Face it, doing routing or consolidation manually is not optimal. Again, there are systems that are so much better at that. Let them do it. It will save costs and on average 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. 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. 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 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. Perform routing and consolidation. Face it, doing routing or consolidation manually is not optimal. Again, there are systems that are so much better at that. Let them do it. It will save costs and on average 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 PG and BP and many other CPG companies. They can help you reduce freight rates and save money.
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