10 Tips to Reduce Freight Costs

6. Analyze and reduce surcharges

There are two types of surcharges. Those that are charged because certain (service) choices are made when sending the transport order. Think of an urgent delivery, delivery at a certain time, delivery with a truck with a ramp, delivery on a floor, etc. In addition, there are surcharges that are charged afterwards and unexpectedly. For example, because no one was available at the time of delivery and a second delivery must be scheduled, waiting times, incorrect freight, problems with goods, etc. Ensure insight and control over all surcharges that are charged. Ideal is registration and approval during the operational process, so that invoice control becomes easy. Analyze the surcharges afterwards and discuss with the relevant stakeholders to reduce them. If you do not have insight and control over surcharges, read on at point 10.

7. Find the ideal balance between contract rates and spot rates

Transport orders are forwarded either from contract rates (and price agreements) or based on a received spot rate. Contract rates provide certainty in terms of price fluctuations as well as in the case of necessary service and reliability. The costs of spot rates can sometimes be much lower, but availability is not guaranteed. After all, a large percentage of all trucks are empty and service providers sometimes prefer to transport something rather than nothing. It is important for companies to find the ideal mix between contract and spot rates that suits their strategy. With our transport management software, shippers can easily send transport orders from contracts or request spot rates when desired.

8. Use a different modality, larger or different trailer

Investigate the possibilities for transporting goods differently. This includes transportation by train, barge (inland waterways), by sea, in containers instead of trucks, or with larger trucks such as LZVs, mega or jumbo trailers. In all cases, this will not only result in cost savings but also have benefits in terms of transport sustainability.

9. Automate the operational process with transport management software

Shipping often involves a lot of manual work for shippers, including sending and keeping transport orders up-to-date and managing surcharges. When this is still done via emails or logistics service provider portals, mistakes are made too often. Even ERP systems are often too limited to perform these tasks well. In addition to the fact that managing the order flow and surcharges involves a lot of manual work and therefore costly time, there is sometimes also miscommunication about loading and unloading data. This can result in logistics service providers showing up too early or too late to load or unload, which can result in additional (incorrect freight, urgent extra delivery) surcharges. Solve this easily by using a TMS. Automate the operational process, gain control over orders by managing order statuses, and reduce transportation costs by preventing misunderstandings.

10. Take Control and become your own Control Tower

The topic of Control Towers is very trendy. We let a 3PL or 4PL specialist organize all of our transports! We expect the provider of this service to achieve all 9 points mentioned above, we expect complete transparency in everything that is done, and in doing so we easily lower our transport costs. It’s no secret that for such structures, Control Tower providers often charge gigantic amounts and transparency is often lacking…. An easy way to lower transport costs is to act as your own Control Tower. What do you need? A suitable TMS that allows shippers to easily analyze and optimize themselves. If you prefer to outsource the most complex aspects of optimization, we call that: transport management services. Last but not least, make sure that your Control Tower partner is completely transparent. Make sure beforehand that your partner does not receive commissions from carriers. If your Control Tower partner has their own trucks, make clear agreements. Make sure they do not use them suboptimal and therefore for their own benefit.

If you want to know more about how we can help you lower your freight costs, feel free to contact us.