Selecting the best shipping method for your business can save thousands of dollars if all options are considered. As part of your Logistics Strategy and using a Cost Benefit Analysis, transportation is one area where a business can have a great impact on cost and customer satisfaction.
Trucking
Use of freight haulers and other commercial carriers can be reduced with some thought to your company’s Logistics Strategy. Planning orders or shipments to take advantage of quantity discounts can help to offset costs. Joining a business Co-Op to ensure enough need exists between businesses to fill a truck to reduce the cost of shipping. Consider out-sourcing your transportation needs. This will reduce cost of fleet management. Negotiate with private or independent truckers to make hauls. Consider another method of transportation for your goods.
Air Freight
Use of major air freight haulers will provide you with reduced costs if you provide a sufficient amount of business. Reduced prices for FedEx or UPS for example may make it a viable logistics choice. By providing the product faster it may improve customer satisfaction and cost of the air shipment can be paid by the consumer or help to reduce your overall shipping costs.
Shipping
From cargo container ships to barges, shipping should not be overlooked. There is a vast shipping industry in the United States and Canada that may be utilized to move cargo. Compare prices for shipping as opposed to trucking or air freight. Almost any commodity can be moved from the north to the Gulf of Mexico utilizing the Great Lakes and Mississippi shipping lanes. Open Ocean shipping may be cost effective up and down the east and west coasts. Do not discount the costs of waterborne shipments. They may very well be less than you anticipated with the increased cost of fuels involved.
Rail
Increase use of rail shipment. It is the most cost effective transportation per mile. It is limited by where in the country the rail lines may go. When coupled with rail and truck, it is an attractive option to reduce costs.
Freight Forwarders
Contracting freight forwarders to handle your shipping needs is possibly your best option. They work with truck, air, sea, and rail shippers and can negotiate reduced rates for their customers. You deal with only one company to provide your shipments at the least cost. Letting them pick and chose the best method to ship or deliver your material on time, where needed. This frees up your shipping departments and allows you to pass the cost on to your consumers in a more even fashion.
Freight forwards should have less fluctuation issues than negotiating individual shipments. They level the cost, thus improving your ability to plan for future shipping costs and price adjustments to cover transportation needs.
