How to Reduce Less Than Truckload (LTL) Freight Costs

If you are in the transport and freight management business, then you are always looking for ways to lower your freight costs. Generally, Less than Truckload (LTL) shipping is a little more complicated compared to Full Truckload (FTL). Despite this complexity, there are several areas you could be saving money. Below are some of the ways you could cut on cost in LTL shipping.

Choosing the Right Carrier

If you intend to cut on cost, then you need to diversify and shop around for the best carrier. This is because different carriers offer different rates depending on their areas of specialization. Looking for alternatives also gives you some bargaining power rather than sticking to a single carrier. Don’t hold yourself back if you have to work with different carriers. Remember, it is not about the number of carriers you are working with but rather finding the one who best suits your needs.

Negotiate for the Best Rates

When negotiating for the best freight charges, most people focus primarily on the discount hoping to get the highest discount. However, there are so many things that you could factor into the conversation. Whereas the idea of a massive discount seems intriguing, consider looking at the bigger picture with regards to the quoted price against the market going rates. Accessorial rates should also be reviewed when negotiating the price. In LTL shipping, the accessorial charges should be charged upon an agreed rate or even in some instances waived entirely. One charge that most people fail to negotiate but should be negotiated is the fuel surcharge. Whenever you bring up the issue to do with such charges that are often ignored, the carrier will be willing to work out a common charge that is acceptable to both parties.

Packaging for Price

Today, most carriers are adopting what is referred as dimensional weight pricing systems. This is because when shippers are charged based on the weight of the package, carriers are likely to lose space and money. For example, when a carrier packages a pair of socks in a large box, which would be a waste of space and money-space that would have been used to package more items.

Investing in Transport Management Software (TMS)

In LTL shipping, where goods are likely to be loaded and offloaded for various reasons while on transit, investing in transport management software is of great benefit to the shipper. Just as the name suggests, a transport management software is meant to assist companies manage freight decisions more efficiently. Having such software will help you run the supply chain more smoothly.-something that is a challenge in the transport/logistics industries. We can achieve this through data analytics. These analytics show you how the operational decisions you make affect your business in the long-term.