Running a business comes with many expenses, and freight shipping costs are often one of the largest. With rising fees, it’s essential to find ways to reduce unnecessary expenditures while maintaining the quality of your services. By making a few strategic adjustments, you can save time and money.
In this short article, we will be exploring the key factors to consider in freight shipping and shipping containers. These tips will simplify your logistic process and help you manage various shipping requirements with ease.
Top 8 tips for optimizing shipment and cargo for smooth freight shipping
The top eight tips for seamless shipment and cargo movements are as follows –
Know Your Transportation Options
There are three main transportation methods: ocean, air, and ground. Ocean shipping is typically the most cost-effective option, particularly for international shipments. For local shipments, rail transportation can often be cheaper than trucking. A mix of these options can further reduce costs and improve delivery efficiency.
Outsourcing your transportation can also result in savings. You may reduce shipping costs by 3-5% by hiring a logistics provider instead of managing your own fleet. However, it’s important to choose a reliable, well-established broker to ensure smooth operations and avoid unnecessary complications.
Consolidate Your Goods
Consolidating shipments is a great way to lower freight costs, potentially reducing expenses by up to 25%. This process involves combining smaller shipments into one larger shipment, which is more efficient and cost-effective. Many large companies, such as CVS and Colgate, use consolidation programs to streamline their logistics.
Although consolidating may take more time, the savings can make it worthwhile. This approach can help reduce labor costs and keep dock spaces free, while still delivering products to customers in a timely manner. Reach out to your local Chamber of Commerce to find reliable shipping partners for consolidation.
Be Smart About Packaging, Product Design, and Cartons
Packaging is a significant but often overlooked factor in shipping costs, accounting for roughly 10% of supply chain expenses. However, transportation makes up about 60%, and warehousing another 25%. This makes it crucial to consider packaging design and specifications when aiming to improve shipping efficiency.
By minimizing the space each product occupies, you can maximize the number of items shipped, reducing transportation costs. Additionally, choosing the right shipping materials can help avoid unnecessary expenses.
Another way to save is by reducing the amount of support packaging, such as airbags and strapping, used in cargo. Speak with your carrier to find the optimal amount of packaging needed to protect your products. This reduces supply costs and frees up more space for additional goods.
Ship More, Less Frequently
Encouraging customers to purchase in bulk or place larger orders can significantly reduce freight costs. Shipping ten pallets in one day is far more efficient than sending two pallets every few days. You can incentivize bulk purchases by offering benefits such as free shipping for orders over a certain amount. Retailers can also be encouraged to buy in bulk, helping to reduce overall shipping expenses and increase profitability.
Utilize a Load Board
Load boards are a great tool to find cost-effective shipping options. For one-off shipments, look for carriers who can carry your goods as backhaul. This is beneficial for carriers since it helps them make money on trips that would otherwise be empty. By shopping around, you may find carriers willing to take your shipment for just the cost of fuel and a small fee, saving you up to 20-40%. Focus on local carriers in your frequent shipping areas and offer later pickup times to increase your chances of finding cost-effective backhaul options.
Ship Off-Peak
Scheduling shipments during off-peak days can lead to significant savings. Fridays are generally less busy since many customers want their products stocked by Thursday in preparation for the weekend. However, this varies depending on the type of cargo you’re shipping; for example, perishable items have a shorter window compared to electronics. Mondays are also quieter and can provide savings of up to 10% compared to peak shipping days. Adjusting your shipping schedule to avoid high-traffic times can help reduce overall freight expenses.
Also Read, How to Calculate Cargo Shipping Costs: A Step-by-Step Guide
Develop Relationships with Carriers
While it’s common to shop around for the best deal, building a long-term relationship with your carriers can offer numerous benefits. Developing a steady, reliable partnership with carriers can improve transportation management and streamline your operations.
A long-term contract allows the carrier to find additional customers in your area, which helps create a more efficient network with fewer dead miles. This, in turn, leads to better rates and more reliable service. By offering consistent freight volumes, you strengthen the relationship with your carrier, making it more likely that they will prioritize your shipments during times of capacity constraints. Loyalty can lead to better rates and service in the long run.
Know the Tariffs
When shipping internationally, understanding tariffs and trade regulations is crucial to saving money. Non-tariff trade barriers, such as regulations aimed at reducing the import of goods from sweatshops, can make crossing borders expensive. Being aware of these tariffs allows you to avoid unexpected costs and ensure smoother international shipping.
Conclusion
Shipping doesn’t have to be a major financial burden. Avoid the mindset of “this is how it’s always been” and take proactive steps to reduce costs and increase profitability. By selecting the best mode of transportation, cultivating long-term carrier relationships, and utilizing load boards, you can make a significant difference in your shipping costs while enhancing your overall business efficiency.
We at Lading Logistics, provide effective and seamless freight shipment for businesses across the globe. Contact us today for your shipping requirements.
