We pick up with part 2 of our series on how to reduce freight rates and save money. In our conclusion, we discuss the next 5 key tips on how to save money on transportation costs.
1. Did you know that most companies, according to the DOT do not ship trucks full? By optimizing truckloads, you can save money and reduce freight rates. The median weight capacity on shipping loads is more than 47,000 lbs. It is rare that companies achieve this weight. Procter & Gamble, one of the best run supply chains in the CPG business, improved its loads using a system called AutoVLB from Transportation l Warehouse Optimization. P & G also pocketed a 7% savings.
2. You would never think a company would ship a load unnecessarily. Believe it or not, it happens all the time. Simplifying assumptions often lead to unnecessary or wasteful moves. For example, it is easier to ship from a plant to its outside warehouse and then onto the distribution centers spread around the US. Shipping direct form the plant requires more planning and coordination to get the right mix to the remote DC's. Here is where systems can help - do the planning and bring the few cases of slow moving product to the plant instead of moving the many pallets of materials through the DC.
3. Make sure you utilize the right shipping mode. The traditional method of using a tractor-trailer may not be the least expensive mode of shipment. When there is a high incidence of empty 40 ft containers, Steamship lines are very eager to get their containers back to port. Even though the load size may be diminished, the cost savings from loading these boxes can be great because of shipping deals that can be made.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Create the right mix of private fleet, dedicated trucks, dedicated capacity and spot-market purchases. The right mix can provide the right level of shipment security and be very good supply chain management. Use private fleet for high-service customer deliveries where back hauls are available or the length of haul is short. Dedicated trucks can be more cost effective - but you need to keep them moving too. Dedicated capacity is just that - some guarantee of the number of trucks that the carrier guarantees to provide on any day.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
Transportation | Warehouse Optimization (TWO) had worked with the best of the best. Procter & Gamble, and other Fortune 50 companies are among their client list - P & G is a long-term client since 1992. TWO has saved P & G millions of dollars with transportation consulting solutions. Taking a long-term view, they understand the industry, the market place, and like good consultants do, keep the client as the top priority. Contact them at www.TransportationOptimization.com for your free consultation today. Also TEST YOUR SKILLS and see how well you manage your costs. Load a truck and see how efficient you are. - 15266
1. Did you know that most companies, according to the DOT do not ship trucks full? By optimizing truckloads, you can save money and reduce freight rates. The median weight capacity on shipping loads is more than 47,000 lbs. It is rare that companies achieve this weight. Procter & Gamble, one of the best run supply chains in the CPG business, improved its loads using a system called AutoVLB from Transportation l Warehouse Optimization. P & G also pocketed a 7% savings.
2. You would never think a company would ship a load unnecessarily. Believe it or not, it happens all the time. Simplifying assumptions often lead to unnecessary or wasteful moves. For example, it is easier to ship from a plant to its outside warehouse and then onto the distribution centers spread around the US. Shipping direct form the plant requires more planning and coordination to get the right mix to the remote DC's. Here is where systems can help - do the planning and bring the few cases of slow moving product to the plant instead of moving the many pallets of materials through the DC.
3. Make sure you utilize the right shipping mode. The traditional method of using a tractor-trailer may not be the least expensive mode of shipment. When there is a high incidence of empty 40 ft containers, Steamship lines are very eager to get their containers back to port. Even though the load size may be diminished, the cost savings from loading these boxes can be great because of shipping deals that can be made.
4. Keep abreast of the market and renegotiate the freight. And when you can, lock in the rates for multiple years. Market conditions, your freight payments, and timing dictate this move, but if it looks good, take the chance. It can reduce freight rates for many years.
5. Create the right mix of private fleet, dedicated trucks, dedicated capacity and spot-market purchases. The right mix can provide the right level of shipment security and be very good supply chain management. Use private fleet for high-service customer deliveries where back hauls are available or the length of haul is short. Dedicated trucks can be more cost effective - but you need to keep them moving too. Dedicated capacity is just that - some guarantee of the number of trucks that the carrier guarantees to provide on any day.
Working with the right partner and eliminating waste is the best way to reduce truckload freight rates.
Transportation | Warehouse Optimization (TWO) had worked with the best of the best. Procter & Gamble, and other Fortune 50 companies are among their client list - P & G is a long-term client since 1992. TWO has saved P & G millions of dollars with transportation consulting solutions. Taking a long-term view, they understand the industry, the market place, and like good consultants do, keep the client as the top priority. Contact them at www.TransportationOptimization.com for your free consultation today. Also TEST YOUR SKILLS and see how well you manage your costs. Load a truck and see how efficient you are. - 15266
About the Author:
Tom Moore and his associates at Transportation l Warehouse Optimization will help you reduce freight rates and save you money. Transportation l Warehouse Optimization works with companies such as P&G and BP and many other Fortune 500 companies. They can help you reduce freight rates and save money.
