These 4 methods can help you bring FTL shipping expenses down.
Click To Tweet

Lower Your Shipping Costs

Freight shipping costs generally don’t vary based on what exactly you’re transporting. Rather, FTL rates depend on a few other factors that, when taken advantage of, can help you pay a little less. Here’s how you can lower your FTL rates:

1. Limit delay times
2. Pay within carrier terms
3. Lead time from tender to loading time
4. Try using an app

1) Limit Delay Times (Detention)

One common factor in increased costs is repeated delays at both shippers and consignees. Carriers are making money when the wheels on the truck are moving fully loaded with freight. As well, almost all carriers charge some form of detention which will add additional charges to your invoice. The carrier may have their next pick-up already scheduled (after your pick-up and delivery) and any delays put them in jeopardy of being late for their next load, which could cost them a customer. As an example, we have seen some shippers require a pickup appointment to be scheduled and then don’t load the truck that arrived on time for many hours. Be a shipper that carriers want to pick-up from, it will dramatically reduce your rates over the long-term.

 2) Pay Within Carrier Terms

Another reason you might accrue higher transportation rates is the terms you pay in.  Carriers run on very tight budgets and expect timely payment (typically 30 days), if your terms are longer, this is affecting your rates negatively. Inversely, we see many smaller FTL firms that factor their invoices for a % of the load (invoice). Inquire with your carrier to see if they offer a “quick pay” rate reduction. In many cases this is an easy way to reduce your transportation invoice by 3-4%, which can add up quickly on the FTL side of transportation, due to the high overall cost of the shipment.  Pay on time or early and in full to ensure you are getting the best possible rate.

3) Lead Time (At Least 24 Hours)

A major factor in transportation cost when working in the spot market for FTL, is the amount of lead time the carrier has to make the pick-up. Understanding that many FTL shipments can happen the same day due to customer constraints, the more lead time you have the more competitive rate you will be able to negotiate. If able to give carriers at least 24 hours notice on FTL’s, you will see reductions in your rates.  

4) Try Using an App

A specialized app can help you drive down cost as well. The “right” app will create a competitive market for carriers to bid on your freight which will drive your cost down. Be sure to choose an app that also has the following capabilities: vetting of carriers that meet minimum safety requirements, able to award, tender and track shipments, GPS tracking, and the management of invoicing & payments. Any app should also give you accessibility to a much larger carrier pool of qualified transportation providers. With all this information at your fingertips, you can quickly find and resolve any issues that may arise. More importantly, however, this will help ensure you are receiving the most competitive rates in the market and still allow you to have a direct relationship with the carrier. 

Pro Tip: Freight Cowboy is launching an app for FTL in late 2019! Stay tuned for developments on progress and how this new app can help you with shipping management.

Save on FTL Freight Rates

Shipping costs add up quickly, and most businesses want to keep their expenses as low as possible. Fortunately, with a little strategic planning around full truckloads, it’s more than possible to lower your FTL rates by a significant enough margin that it will make a difference in your business’s overall budget.

Connect with us to learn more about our upcoming app and how you can save more on your shipping expenses!

The post 4 Ways to Lower Your FTL Rates appeared first on Freight Cowboy - Shipment Management.

Negotiating with parcel carriers for the best deal can be a challenge, due to the complexity in the contracts. Watch out for these 4 underhanded tricks.
Click To Tweet

Navigating the Contract Negotiation Process

As you discuss the details and pricing of a contract with your potential parcel carrier, watch out for a few common tricks that could end up costing you more money later on. Ask for more details and a better deal if you notice the parcel carrier appears to be using one of these common tricks:

1. Highest discounts in areas you don’t use
2. Earned discount tiers not favorable “enough” for the shipper
3. GSR waivers
4. Knowing your shipping data better than you

1) Highest Discounts in Areas You Don’t Use

Most shippers will immediately see the problem here. A parcel carrier that eagerly offers discounts, but mostly in areas you won’t be using, isn’t truly trying to save you money. Knowing what service levels, zones and package characteristics you use the most and focusing on these areas will have a huge impact on your total parcel budget. 

2) Earned Discount Tiers Not Structured Properly for the Shipper

Many shippers aren’t aware of this, but you can always negotiate a carrier contract at any time. While earned discount tiers (ED Tiers) can be beneficial in providing further incentives, you want to monitor your gross spend and understand the entirety of your contract including your discount tiers. These tiers and the discount associated with them are negotiable. Also, the means of calculation is negotiable. As an example, if your package count is very seasonable an ED Tier structure based on your 52-week rolling average could hurt the additional discounting. 

3) GSR Waivers

Some carrier agreements will include a guaranteed service refund waiver. That’s why it’s critical for you to read the details of your contract. Never sign a contract that prevents you from receiving refunds when you deserve them. In many cases, this will be a last-minute addition by the carrier in order to increase their margins. As you recall, we typically see anywhere from 1-8% return on total spend, in relation to filing claims for late deliveries, manifested never shipped, erroneous residential charges, etc. when performing a thorough audit your FedEx or UPS invoice. 

Pro Tip: Never skim through your carrier agreement contract. You could be missing important pieces to the puzzle that prevent you from receiving refunds you deserve!

4) Knowing Your Shipping Data Better Than You

It’s necessary to review your shipping history before negotiating your parcel contract. If you aren’t aware of your previous parcel expenses, shipping zones, package weights, effect of your package size and dim divisor and other factors, you will be at a disadvantage and lose leverage in your negotiations. Now, if your carrier knows your shipping data better than you (which they typically do), you will not be able to negotiate a better deal. In many cases, hiring a professional audit firm that has robust reporting can help provide the reporting needed for you to gain leverage with your carrier of choice. 

Keeping Your Shipping Costs and Process Manageable

As you negotiate shipping rates and other costs with your parcel carrier, keep in mind that the company likely has its profits in mind more than your savings. While this isn’t always the case, it does mean that you need to advocate for yourself, audit your parcels, study your shipping history, and ask plenty of questions to ensure you’re actually getting the best deal out of your parcel contract negotiation.

Connect with us to learn more about shipping cost reduction and balancing your bottom line.

The post 4 Common Tricks Used by Parcel Carriers in Contract Negotiations appeared first on Freight Cowboy - Shipment Management.