It is expected that 2016 will be the year the freight transportation industry will implement dimensional pricing in favor of the NMFC classification system. Fed Ex and UPS implemented dimensional pricing last year. It's just a matter of time before the freight carriers follow suit. In anticipation of this move we want to offer some suggestions on how to mitigate the affects of this pricing change for your company.
Consolidate your shipments
Transportation cost are generally lower per unit the more skids and weight are shipped. Work with your customer's production manager to review their raw material needs timetable. Often times purchasing or who ever is arranging the transportation services is unaware of the production schedule. There are significant savings potential shipping more once a week than separate shipments twice per week. Another option is to consolidate several shipments on one truck and pay a truckload rate with drop off charges. As long as the shipments are reasonably in route to the carriers desired destination you will certainly save money paying for a consolidated truckload rather than separate LTL shipments with no affect on transit times.
Maximize the density of your pallets
A truck can only haul so much weight. LTL carriers make a profit by fitting as many different LTL shipments into one single trailer as possible. They would much more prefer a 5,000lb shipment that takes up 25% of the space in the trailer, to a 5,000lb shipment that only takes up 10% of the space. The more space your shipment takes up in the trailer, the more you'll be charged to ship it. Stack an extra row on top of each pallet to possibly eliminate an extra pallet. Brainstorm about all the ways to make your shipment take up less space, and you will definitely see a financial reward.
Review your packaging protocols
Review your current packaging procedures to look for ways to increase efficiencies and minimize potential damage in transit. Depending upon your mode of transportation your freight is exposed to a myriad of potential dangers. Loading docks, warehouse fork lift drivers, trucks, railcars, ships and all offer different hazards. For example, truckload shipments typically encounter only low drop dangers while loading and unloading. Single packages on the final leg of their travel may be handled in less than desirable ways. LTL’s multiple cross-docks and forklift handling create the most hazards for shipments. Your product can be transferred several times when shipping cross country. Freight shipped via rail or intermodal can sustain damage as a result of the force encountered in the hump yards. Trains are re-coupled by slamming them in to one another. If your going rail make sure your particular product and its packaging can endure the rough ride and hump yards.
Ensure the accuracy of your information
A sure way to cost yourself money is by inaccurate pickup or delivery information. Missed pickups, late deliveries and re-delivery charges are all due to inaccurate information. In addition to the pickup and delivery service be certain the freight description and weight are accurate. Some shippers are tempted to under declare their shipment weight in the hope of a saving some money. Just about every carrier has a weights and measures department to insure accurate shipment weights. Under declaring a shipments weight can result in fines for an overweight vehicle which you could be liable for. Worse, an overweight vehicle is dangerous to the driver and other motorists. You can be help personally liable in the event of an accident, injury or death if it can be proven the truck weight was a factor. Lastly, confirm your NMFC and freight description are accurate. Inaccurate descriptions can cause additional charges.
Look into a 3PL to achieve your cost cutting goals
If your carrier tells you that you don't have the volumes or correct mix of freight for an attractive discount see if you can take advantage of the buying power of a 3PL logistics company. Not only can you achieve cost savings but you will likely enjoy the benefits of a 3PL technologies in terms of information reporting. Land-Link Traffic Systems specializes in cost savings technologies for shippers. We will review your situation with you personally and in detail. If we see an area for cost savings we will guarantee to save you that money by paying it to you up front. Contact one of our logistics professionals today for a no obligation freight review.
Land-Link, a well respected professional organization, has been providing its clients with effective transportation and logistics solutions since 1978.
