Businesses are always on the lookout for ways to reduce costs. Whether you run a large or small business, shipping is a significant expense if you’re involved in transporting goods. What’s more, with shipping rates continually fluctuating, it can be hard to account for them when budgeting.
To meet customers’ ever-increasing demands, businesses must find a balance between offering excellent service and reducing shipping costs. Fortunately, when it comes to freight shipping, there are several effective ways to save money.
If you’re looking to reduce freight costs to increase efficiency and improve your bottom line long term, here are some efficient tips to help cut costs.
Choose a Cost-Effective Mode of Transport
There are three main transportation methods for freight shipping: ocean freight, air freight, and truck freight. Each method has its advantages. However, the cost of each differs significantly.
Ocean freight is the most affordable mode of transport, especially when moving a large number of goods internationally. Unfortunately, it is also very slow. Air cargo is speedy but very expensive. Transporting goods by plane also has limitations in terms of cargo weight and dimensions.
Trucking can be cost-effective, but it is slow over large distances, and you may be limited by space. Combining all three options is often the best way to cater to all customers and order types.
No matter which transportation method you choose, it’s important to choose a reliable freight company. Research online reviews and speak to business associates to find a suitable shipping carrier.
Ship Off Peak
Shipping on off-peak days is generally a lot cheaper than during peak days. Depending on the type of goods, the carrier, and the time of year, you can lower costs significantly when shipping off-peak.
In many cases, shipping off-peak is not possible. However, where orders aren’t time-sensitive, it’s beneficial to distribute goods off-peak.
Hire a Third Party Logistics (3PL) Company
Freight shipping is not only costly, but it is also complicated. Shipping is particularly difficult for small businesses to manage when they start to expand. They may not have the facilities, expertise, or contacts to perform cost-effective shipping.
In such circumstances, working with a 3PL can help reduce costs. As a specialist logistics provider, a 3PL has years of transportation management experience, allowing them to offer expert shipping services. They generally have access to advanced technologies, management systems, and expert staff, ensuring you avail of a cost-efficient fulfillment process.
Be Aware of Additional Shipping Costs
It’s difficult to lower your business’ shipping costs when you aren’t fully aware of the potential extras. Many transportation methods and carriers have different charges beyond their regular freight rates.
Analyze the true cost of various shipping methods and eliminate unnecessary expenses. Duties, taxes, fuel surcharges, and handling charges are common expenses added to your standard rates.
Consolidate Your Shipments
Consolidated shipping is the process of combining several less than truckload (LTL) or less than container load (LCL) shipments from various merchants into one full shipment.
As a business, it allows you to take advantage of reduced shipping rates because you only pay for your goods’ space. For shipment companies, it allows them to optimize supply chain logistics by shipping at a higher capacity and increasing revenue.
The downside to consolidating shipments is that it takes a lot longer for your goods to reach their destination. Due to the frequent stops and extended journey time, your items also have a higher likelihood of being damaged.
Consider reaching out to your local chamber of commerce to find other businesses that may be interested in consolidating shipments with you.
Use a Load Board
A load board is an online platform where logistics companies, shippers, and freight brokers can post and communicate about business.
Load boards are excellent resources for reducing shipping costs for your business. They are most effective if you have a one-off shipment. Carriers may have backhaul available to carry your items, which is generally offered at a discounted rate.
Ship More Goods But Less Frequently
A mistake made by many businesses is that they don’t encourage their customers to buy in bulk enough. Create incentives or market your products to be purchased as bulk orders. This has multiple benefits, but it is particularly advantageous in lowering shipping costs.
Shipping larger orders less frequently is much more cost-effective. Instead of having your customers order their usual supply of goods weekly, bi-weekly, or daily, entice them to buy monthly.
Another great incentive to get customers to purchase more goods per order is to offer a free shipping threshold. When someone orders goods of a certain value, they get their items delivered for free.
Don’t Be Afraid to Negotiate
While it can be intimidating, tough negotiations are vital in business. Reach out to a range of shipping companies and negotiate to find the best deal for your company.
No matter what you’re delivering, working with a world-class shipping organization like Asiana USA is always beneficial. To gain expert advice from one of our staff members, get in touch with us today, at (855)-500-1808.