As we continue with part two of our series on how to reduce freight rates and save money on transportation, shipping truckload freight, we look at the remaining 5 tips that can put money in your pocket.
1. Make sure your trucks ship fully loaded. You would be surprised to learn, according to the DOT, fully loaded trucks rarely happen. There are systems that help you achieve that goal. One such system is AutoVLB from Transportation | Warehouse Optimization. In fact, Procter & Gamble, a client of Transportation | Warehouse Optimization since the early 90's, claim they realized a 7% savings by using this system.
2. Simplifying assumptions often lead to unnecessary or wasteful moves, and that can cost money. You can overcome this with enhancements to the order management system that dynamically defines ship point for any order based on cost and fill rates. This is an enhancement because most order management systems use a deterministic approach: if, for example, you are a customer in Indiana, you will always be shipped from Chicago. You don't want to ship loads unnecessarily. Here is how it works. In a deterministic order system, a customer in Indianapolis would receive a load from its supply point in Chicago regardless if the entire product was made and in stock in Nashville. Eliminating the unnecessary shipments to Chicago and then back to Indianapolis saves transportation costs.
3. Optimize modes. Conventional tractor-trailer shipments or even inter-modal 53 ft containers are not always the most economical way to ship. Steamship lines are often desperate to get their 40 ft containers back to port. While the load size is diminished, the savings can more than make up for that apparent inefficiency. Shipping even a few containers will reduce freight rates and increase cost savings.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Expand your base. You have to have the right combination of private fleet, dedicated trucks, dedicated capacity, and spot-market level purchases. Not only does this provide you with shipment security but also it can be very good supply chain management. This gives you good coverage for your high service customers with your private fleet on the short turnarounds, and any other thing that comes up. You have to manage it, but if run well, it can reduce freight rates.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
When you consider a Transportation consultant, consider Transportation | Warehouse Optimization. They have been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. Transportation | Warehouse Optimization takes a long-term approach, they know the market place, and they keep the client as top priority. Contact them at: wwwTransportationOptimization.com (615) 791-8000 for transportation cost reductions or solutions to warehouse challenges. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings. - 16747
1. Make sure your trucks ship fully loaded. You would be surprised to learn, according to the DOT, fully loaded trucks rarely happen. There are systems that help you achieve that goal. One such system is AutoVLB from Transportation | Warehouse Optimization. In fact, Procter & Gamble, a client of Transportation | Warehouse Optimization since the early 90's, claim they realized a 7% savings by using this system.
2. Simplifying assumptions often lead to unnecessary or wasteful moves, and that can cost money. You can overcome this with enhancements to the order management system that dynamically defines ship point for any order based on cost and fill rates. This is an enhancement because most order management systems use a deterministic approach: if, for example, you are a customer in Indiana, you will always be shipped from Chicago. You don't want to ship loads unnecessarily. Here is how it works. In a deterministic order system, a customer in Indianapolis would receive a load from its supply point in Chicago regardless if the entire product was made and in stock in Nashville. Eliminating the unnecessary shipments to Chicago and then back to Indianapolis saves transportation costs.
3. Optimize modes. Conventional tractor-trailer shipments or even inter-modal 53 ft containers are not always the most economical way to ship. Steamship lines are often desperate to get their 40 ft containers back to port. While the load size is diminished, the savings can more than make up for that apparent inefficiency. Shipping even a few containers will reduce freight rates and increase cost savings.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Expand your base. You have to have the right combination of private fleet, dedicated trucks, dedicated capacity, and spot-market level purchases. Not only does this provide you with shipment security but also it can be very good supply chain management. This gives you good coverage for your high service customers with your private fleet on the short turnarounds, and any other thing that comes up. You have to manage it, but if run well, it can reduce freight rates.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
When you consider a Transportation consultant, consider Transportation | Warehouse Optimization. They have been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. Transportation | Warehouse Optimization takes a long-term approach, they know the market place, and they keep the client as top priority. Contact them at: wwwTransportationOptimization.com (615) 791-8000 for transportation cost reductions or solutions to warehouse challenges. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings. - 16747
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 works with companies such as Procter and Gamble and BP and many other CPG companies. They can help you reduce freight rates and save money.
