How to Reduce Freight Costs

Freight costs eat into the bottom line of almost every company. Every dollar spent on freight can equal $20 or more in sales, so if your company can save $100,000 in freight charges that can equate to $2 million in sales.

What with fuel costs on the rise and the economy starting to rebound, shippers will undoubtedly see freight cost increases in the months ahead. But there IS something you can do about it.

If you haven’t re-bid your freight business for a while, now is the time to do so. Here are a few tips on what you should do:

Step #1: Develop a strategy. What are you going for? Lower rates? Better service? How do you know if your rates are already low, or if there are opportunities to reduce costs? Many shippers have been surprised by a “backfire” when they negotiate rates that are already competitive as responding carriers (even the ones they already use) come back to them with higher, not lower rates. Be careful with this — it’s a good idea to do some freight …

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How to Control and Reduce Fuel Surcharges

If you’re reading this you probably want to figure out a way to get control over fuel surcharges. And who can blame you? Just look at diesel fuel prices today — people look forward to filling up their tanks about as much as going to the dentist. But the extraction is from your wallet, not from your mouth, and it hurts just as much. But you are not alone! — you’re in the same boat with thousands of other managers.

Why are some fuel surcharges based on a percentage of the freight charges while others are based on cents per mile? Why would a fuel surcharge on one shipment be more than that on another? What if these shipments have the same density, the same origin and destination, and the same weight, but different value? For example, freight charges — and their resulting fuel surcharges — are typically higher on a shipment of laptop computers than on a shipment of other products with the same density but much lower value. This means that somebody might be making some money on …

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How to Reduce Air Express Costs

Want to reduce air express costs? You can!

It’s been said that “time is money”, but when it comes to air express shipments, time “costs money”. Plenty of it. While each shipment may cost only a few dollars, it really adds up when you look at company-wide expenditures for air express services. In fact, many companies spend millions of dollars on air express services each year. One of the big drains? Priority Overnight and Next Day Air services.

Here’s the problem. Many users of these services select premium service options as their default. They automatically select the fastest (and highest cost) services available, even if their packages aren’t all that urgent. What can you do? There are some easy-to-implement things you can do to bring air express costs back down to earth. According to John Harold, president of the San Francisco-based logistics management firm Business Logistics, employee awareness and education is the key: “Many employees nowadays simply ‘default’ to using priority overnight whenever they feel that a sense of urgency is involved”, Harold says. “What they often don’t know is …

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