Freight dollars are not being spent on moving a package from point A to point B. The small package shippers faces the “preordained annual price increases” and accessorial charges that increases every year from the small package carriers. The small package shippers have found a way to insure a profit and their “partner” the small package shipper picks up the tab.
So what can the shipper do?
- Know the weight and zones of your packages.
- Ask for favorable rate charts that benefit the zones and weights of your packages.
- If the other zones and weights on the rate chart go up it does not impact your real spend.
- Study the accessorial charges and see which are having the highest impact.
- Cap or cut the number of packages being affected by the increase.
- Change shipping process to avoid paying these premiums.
- For example if oversize charges.
- Work-with boxing companies and cut the size of your shipping box if possible.
Work with your suppliers and customers.
- Every Distribution Center Manager and Traffic Manager is fighting this battle.
- Team up and ask suppliers their strategy and ideas.
- How can the process be changes to reduce freight cost?
- Use the best ideas and develop relationships for future issues.
- Give the customer options.
- Help the customer, through pricing, take advantage of pricing that is favorable to your rates.
Find out from the small package carriers want or need.
- The carriers are looking at the how your account fits their profit model.
- The better you know what they wish the easier it’s to get a compromise.
- For example the carrier may need more next day or 2nd day volume.
- Ask for a discount and urge your customer to buy those services.
- Take the needs of the major carrier back to ownership.
- Understanding Carrier needs helps management make informed purchasing and marketing decision..
- Using information from all sources to build a freight program that works with in the constraints of the small package carriers ultimately improves every aspect of your freight program.
An educated shipper who works 360 degrees around the freight issue will find money savings and providing better customer service. Crowe Consulting Inc. specializes in helping companies reducing cost and improves their operations.