11 Mai The key carriers/forwarders
Improve Freight Tariffs by selecting the key carriers/forwarders.
When it comes to the number of carriers you hire to move your freight, reducing and consolidating the number of carriers or selecting a dedicated freight forwarder will benefit overall transport logistics.
- Using fewer dedicated « key » carriers enables you to:
- reduce the complexity of administration requirements
- establish relationships and liaisons with supply partners
- negotiate more favorable freight tariffs based on higher volumes for lower prices
- transforming your carrier/ forwarder into a key partner creates a « vested interest » for the carrier/forwarder to retain your business and improve service levels and lower your overall transportation costs.
This process should also involve the establishment of firm contracts for base rates as well as establishing the most beneficial trade routes for the efficient movement of your goods. Make sure you set the terms for your transportation investment. Many carriers will negotiate freight at their terms, not yours, so considerable negotiating skills may be required.
Good contracts help you control costs and avoid expensive add-ons.
Making the Best Transportation Choices (Freight Consolidations)
For many small to medium sized businesses moving freight, shipment volumes are not always sufficient to purchase freight in Full Truck Load (FTL) or Full Container Load (FCL) quantities.
In terms of freight tariffs, smaller shipments tend to cost more, and economies are realized through higher volume.
It is therefore vital to consider your options for shipment consolidation.
Do you consolidate smaller shipments headed the same way?
Do you pool small parcels into « zones » and ship in bulk?
Less than Truckload (LTL) and Less than Container Load (LCL) shipments can be pooled through inbound or outbound consolidation hubs or combined into multi-stop truckload shipments.
Truckload shipments can be moved intermodally or, in some cases, for some companies, they can be linked to national rail transportation on the mainland.
The savings to be realized through freight consolidations are considerable.
As an example, the cost of shipping a single cubic meter crate on its own can exceed 4 times the cost of shipping the same crate within a consolidated container load. Why pay more?
Freight Bids and Spot Market
While it is certainly beneficial to have negotiated freight tariffs with dedicated carriers, you can complement your consolidated transportation strategy by going to the spot market to get competitive bids or by asking for comprehensive bids for your total annual freight volumes.
While this approach may seem incompatible with « Improve Freight Tariffs by selecting the key carriers/forwarders » above, it is not.
In essence, testing the marketplace not only allows you to best match your transportation requirements with true carrier capacity and reduce costs, but can ultimately provide your dedicated service partners with a better sense of your overall freight requirements and an opportunity to reassess their own tariffs.
It also allows you to take advantage of special one-time options and discounts based on availability, as when a carrier’s urgent need to « fill a container » coincides with your particular volume and timing requirements.