How F and B Companies Use 4PL to Solve Capacity Gaps
With the cost of goods rising, resources and manufacturing supplies dwindling, and operational expenses blowing through the roof, finding creative ways of reducing freight costs is a daily struggle for any shipper. The struggle is real for you as a manufacturer, depending on the efficient flow of supplies and commodities. One way to reduce expenses and improve bottom-line profitability is lowering the costs associated with moving freight. Whether it's LTL, FTL, Intermodal, or Parcel shipping, there are several areas and specific ways you can streamline your logistics program.
In this blog post, we'll share 5 tips to help you reduce your freight costs.
Tip #1 - Consider Consolidating Your Freight Shipments
Arguably, the best way to reduce costs on shipping is to limit the number of shipments being received and sent. This starts with consolidating or combining your shipments that are inbound to your company or outbound to customers. One item that is often forgotten is that a leading cost for your shipping is inbound supplies. Believe it or not, inbound shipments can be consolidated with very little effort.
One of the best ways to consolidate shipments is to contact your local Chamber of Commerce or like-minded businesses. The Chamber of Commerce in any major metro area is dedicated to helping their local businesses grow, by connecting like-minded businesses together. This is a great way to begin the process of consolidating freight shipments – especially inbound supplies. The Chamber can connect you with others in your industry, so you can organize your inbound shipments of supplies as consolidated. It's a win-win situation for everybody, so make sure to reach out to the local Chamber or other local businesses to set up a solid co-shipping partner.
Tip #2 – Choose the Right Mode for the Right Shipment
Each mode of transportation is intended for specific applications. The key is to set up your freight management program from the beginning by understanding which mode you should be using for unique needs. Do you send your end goods directly to retailers? If so, work with them to determine which level of shipping service they require. If you are working on inbound shipments to keep your inventory levels strong, be proactive by staying ahead of the curve – and set up FTL shipments that save your company money.
Tip #3 – Build Relationships with Regular Carriers
The logistics world is all about relationships. Carriers and shippers who build solid relationships based on constant or repeat business help each other by creating shipping rates that are fair for each party. For you, working with the same carriers on a consistent basis is a great way to reduce shipping costs. If your business needs to receive shipments on a weekly basis, set up a weekly shipment contract with a specific carrier. You'll quickly discover that if a carrier visits your business frequently, and you work with them constantly, your rates can be reduced. The key is – you have to ask for those lowered rates.
Tip #4 – Ship During Off-Peak Dates
The time and day you choose to ship have a huge impact on the cost. Simply taking time to adjust your shipping days and hours to off-peak times can reduce the price you are paying for inbound and outbound shipments. On average, high volume shipping is at its peak during mid-week days, such as Tuesdays, Wednesday, and Thursdays. Peak times are considered to be 'normal business hours' or from 6:00 am till 6:00 pm.
Of course, the term peak shipping is always unique to the specific type of shipping mode. There are times when parcel shipments during the holidays are 'high-volume' – but an LTL mode might be light volume.
Tip #5 – Work with a Modern 4PL Partner
The truth is that trying to juggle the tips above with your business work schedule can be too much for you to handle. This is why the best way to reduce your shipping costs across the board is by working with a Modern 4PL partner like Redwood. A Modern 4PL partner like Redwood has years of experience working with companies like retailers, manufacturers, distribution networks and all parties within the supply chain. Their knowledge of the entire system, plus the strong relationships they've built with carriers and other logistics partners, permits them to find the best rates and modes of transportation for their clients. See how companies have achieved measurable results by exploring our case studies.
Final Thoughts
Reducing freight costs requires a strategic approach that combines consolidation, mode optimization, carrier relationships, timing, and expert partnership. If you are looking for an experienced logistics partner to assist with reducing freight costs and operational tasks, contact us today to learn how a Modern 4PL approach can help!
FAQs
What are the most effective ways to reduce freight costs?
The most effective ways to reduce freight costs are consolidating shipments, choosing the right transportation mode, building relationships with regular carriers, shipping during off-peak times, and working with a Modern 4PL partner. These tactics help lower transportation spend by reducing the number of moves, matching service levels to actual needs, and improving rate and mode decisions across the supply chain.
How does consolidating freight shipments lower shipping costs?
Consolidating freight shipments lowers shipping costs by reducing the total number of individual moves. When inbound or outbound freight is combined into fewer shipments, you can improve efficiency and often pay less overall. The article notes that even inbound supplies can be consolidated with relatively little effort, and local business connections such as a Chamber of Commerce can help identify co-shipping opportunities.
Why does choosing the right transportation mode matter for freight cost reduction?
Choosing the right transportation mode matters because each mode is designed for different shipment needs and service levels. Matching the mode to the freight helps avoid paying for more service than you need. For example, outbound retail deliveries may require a different setup than inbound inventory replenishment, and using the right fit can create meaningful savings in a freight management program.
How can carrier relationships help reduce shipping costs?
Carrier relationships can help reduce shipping costs because repeat business creates more stable, mutually beneficial rate conversations. When a carrier serves your business regularly, you may be able to negotiate lower rates, especially for weekly or recurring shipments. The key is consistency and direct communication, including asking for the reduced rates that come with ongoing volume.
When is the best time to ship freight to save money?
The best time to ship freight to save money is during off-peak days and hours when demand is lighter. The article identifies Tuesday through Thursday and normal business hours, roughly 6:00 a.m. to 5:00 p.m., as peak periods for many shipments. Scheduling outside those windows can reduce the price you pay, although peak timing can vary by mode.
What is a Modern 4PL, and how can it help lower freight costs?
A Modern 4PL is a logistics partner that manages freight strategy across carriers, modes, and supply chain relationships. It can help lower freight costs by using industry experience, carrier relationships, and broad visibility to select better rates and transportation options. For shippers balancing multiple modes and recurring shipments, it can reduce both cost and operational workload.
