5 Ways Companies Reduce Transportation Costs
Shipping companies are constantly searching for ways to save money, now more so than ever, and for good reason. With the cost of shipping rising exponentially while consumer demand continues to grow in regard to both demand for products and demand for quicker deliveries, it is absolutely essential that shipping companies look for ways to begin cutting down on transportation costs before the demand outweighs the supply.
In this article, we are taking a look at the top 5 methods to reduce transportation costs that your company can leverage right now to begin saving money on future shipments.
Yes, Efficient Packaging Practices Can Reduce Transportation Costs
The less material that can be devoted to packaging, the better. While some packaging is necessary to protect the goods in transit, you actually may be using more than you really need. That’s not to say that you should not provide the best packaging possible for your customers, you might just need to be a bit more attentive to how much you are spending in order to make that a reality.
Talk with your carrier and discuss potential ways you could go about shipping items that require less packaging. Don’t be surprised if they do have a few suggestions for you. Your carriers are, after all, the ones who spend time moving the package. Talk to them to gain some insights into the process of that journey that could influence your packaging decisions.
Or maybe there is a packaging supplies company that offers the same level of quality for a bit less than you are paying now?
Or if you find that your goods are incurring the same amount of damage during shipping using less dunnage (bubble wrap, packing material, etc.) it makes sense to implement a policy of using less of said dunnage. As a side benefit, your company will be able to show that you are implementing sustainable practices by using less material.
And the list goes on.
Whatever route you decide to take, efficient packaging practices will save money on the actual materials needed to pack the goods and will provide more space for storing and shipping of said goods.
Encourage Bulk Orders
A common theme in the shipping industry is that of “shipping more, less frequently”. There’s no doubt about it: if you can ship 20 pallets at once instead of 4 pallets over multiple days, you will save a significant amount of money.
One way to increase this potential is to incentivize your customers to purchase their products in bulk by offering some sort of reduced costs for the shipping of larger shipments. Essentially, you are passing your cost savings onto them. Similarly, you can employ this concept with retailers, just with a bit more leg work.
In a nutshell, the more people who order from you in bulk, the lower your shipping costs will be.
In this scenario, everyone wins. You reduce transportation costs and create larger orders for the company. Additionally, your customer gets to reap the benefits of your cost savings.
Minimize Shipping on Peak Days
Certain days of the week are considered “peak” days. This refers to days when shipments go out to accommodate customers who want to receive their goods before the end of the week. This helps them get and remain stocked for the weekend. When feasible, it is a good idea to ship on “off-peak” days for lower shipping rates.
For shipments such as those containing produce or other perishable items, this may not be completely feasible. However, by developing good rapports with your customers and leveraging your shipping data, you can determine ways to implement “off-peak” shipping times to accommodate them while still being able to reduce transportation costs.
When it comes to non-perishable items, non-peak shipping shouldn’t be a problem for any parties involved. Just ensure that you maintain transparent communication with your customers so that they can adjust accordingly.
There may be little you can do to affect your shipping during “peak season”. However, modifying your operations throughout the week can go a long way in improving your shipping costs over time.
Seek Long-Term Carrier Relationships
The longer you work with someone, the stronger your rapport becomes. This is, of course, so long as working together has been a good experience. It is true that loyalty goes both ways. If you’ve been committed to one carrier for a long time, they will generally show that same commitment. This is often reflected in the offer of better rates for your company.
While it is always wise to shop around for better prices, there is something to be said for long-term rapports. If you know your carrier and they know you, you will likely be able to negotiate a better rate and maintain a happy relationship for as long as it makes sense for both of you.
Consider Partnering with a Transportation Service Provider
If you are looking for ways to reduce shipping costs, transportation service provider partnerships bear consideration. These providers have access to large carrier networks and have significant experience in the transportation industry.
In fact, if you want to get a head start on this, reach out to the team here at Redwood to see what types of rates we can offer you.
Ready to Reduce Transportation Costs for Your Supply Chain?
All processes involved within the supply chain continue to become more expensive and harder to overcome. As the industry changes, shipping companies need to carefully consider their practices to determine where changes can be made.
If you’re struggling to keep up with rising transportation costs, you may want to consider implementing the above tips. As mundane as these tips may seem, that is also the reason they generally go overlooked. However, they can have a tremendous impact on your business. Therefore, treat them as a baseline to begin with. If you don’t have a solid foundation, you cannot expect to scale or improve your business operations.