Saving money is the buzzword in any industry today. That is true in the transportation industry, and a specific concern is the cost of shipping and how to reduce freight rates. In part 1 of a two part series on how to reduce truckload freight rates, we will look at the top 5 of a top ten list of how to save money.
1. Eliminate costs for the carrier and share the savings. It seems obvious: if you save the carrier time and money, you will reap the benefits. For example, Procter & Gamble eliminated the long waits for unloading by providing the customers an incentive to get all trucks turned in two hours. By eliminating hours of hand unloading and counting, carriers turned their equipment faster and had happier drivers. A win for the carriers resulted in a win for P & G and the end result was reduced freight rates.
2. Create continuous moves. In the early 1980's, Xerox started to send trucks on a tour that ultimately ended back at the origin. Xerox paid for every mile driven, and since it was able to keep the trucks loaded, they were rewarded with lower per-mile rates.
3. Rationalize fuel surcharges. Carriers generally overcharge shippers. Carriers make money on the difference between the actual fuel consumption that they achieve and the rate they put in the contract language. They also make money on the difference between the retail diesel prices in the index that the DOT reports and the discounted rates they actually pay.
4. Use software technology whenever possible. It can do away with the administrative work that takes a lot of time. And administrative time is a hidden part of the total freight rate. Eliminating administration can therefore reduce freight rates.
5. Routing and consolidation are other administrative tasks that can be handled well with systems. Doing this manually no longer makes sense. Systems can handle this much more efficiently. They can both reduce time and save on freight rates.
Transportation | Warehouse Optimization has worked with the best of the best. Procter & Gamble, and other Fortune 50 companies are among their client list. More importantly, P & G is a long-term client (since 1992). Transportation | Warehouse Optimization has saved them millions of dollars with expert 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 today. Also TEST YOUR SKILLS and see how well you manage your costs. Load a truck and see how efficient you are. - 15431
1. Eliminate costs for the carrier and share the savings. It seems obvious: if you save the carrier time and money, you will reap the benefits. For example, Procter & Gamble eliminated the long waits for unloading by providing the customers an incentive to get all trucks turned in two hours. By eliminating hours of hand unloading and counting, carriers turned their equipment faster and had happier drivers. A win for the carriers resulted in a win for P & G and the end result was reduced freight rates.
2. Create continuous moves. In the early 1980's, Xerox started to send trucks on a tour that ultimately ended back at the origin. Xerox paid for every mile driven, and since it was able to keep the trucks loaded, they were rewarded with lower per-mile rates.
3. Rationalize fuel surcharges. Carriers generally overcharge shippers. Carriers make money on the difference between the actual fuel consumption that they achieve and the rate they put in the contract language. They also make money on the difference between the retail diesel prices in the index that the DOT reports and the discounted rates they actually pay.
4. Use software technology whenever possible. It can do away with the administrative work that takes a lot of time. And administrative time is a hidden part of the total freight rate. Eliminating administration can therefore reduce freight rates.
5. Routing and consolidation are other administrative tasks that can be handled well with systems. Doing this manually no longer makes sense. Systems can handle this much more efficiently. They can both reduce time and save on freight rates.
Transportation | Warehouse Optimization has worked with the best of the best. Procter & Gamble, and other Fortune 50 companies are among their client list. More importantly, P & G is a long-term client (since 1992). Transportation | Warehouse Optimization has saved them millions of dollars with expert 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 today. Also TEST YOUR SKILLS and see how well you manage your costs. Load a truck and see how efficient you are. - 15431
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 consults with companies such as PG and BP and many other CPG companies. They can help you reduce freight rates and save money.
