How to save money in these economical times is the goal of any transportation manager in industry today. In the first part of our two part series, we are going to closely look at the ten ways in which you can reduce freight rates and save money. In this article, we will look at the top 5.
1. By eliminating costs for the carrier you can share the savings. Procter and Gamble implemented this concept with the end result of reducing freight rates. P & G eliminated long unloading times by providing its customers an incentive if truck unloading was turned around in two hours. They did and it was a win-win for everyone. They shared the cost savings and everyone benefited.
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. Fuel surcharges are favoring the carriers at the expense of shippers. The surcharge is based on fuel efficiency (mile per gallon) far lower than the carrier actually achieves. Carriers also pocket the difference between actual fuel costs and the DOT retail price - which may be quite a bit higher.
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.
When you consider a Transportation consultant, Transportation | Warehouse Optimization has been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view, know the market place and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. Ask for a free consultation. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings.
1. By eliminating costs for the carrier you can share the savings. Procter and Gamble implemented this concept with the end result of reducing freight rates. P & G eliminated long unloading times by providing its customers an incentive if truck unloading was turned around in two hours. They did and it was a win-win for everyone. They shared the cost savings and everyone benefited.
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. Fuel surcharges are favoring the carriers at the expense of shippers. The surcharge is based on fuel efficiency (mile per gallon) far lower than the carrier actually achieves. Carriers also pocket the difference between actual fuel costs and the DOT retail price - which may be quite a bit higher.
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.
When you consider a Transportation consultant, Transportation | Warehouse Optimization has been working with some of the top companies in America, finding practical solutions that have resulted in saving millions of dollars. They take a long-term view, know the market place and keep the client as top priority. Contact them at www.TransportationOptimization.com for transportation cost reductions or solutions to warehouse challenges. Ask for a free consultation. While visiting their website, TEST YOUR SKILLS and see how well you can load a truck or manage cost savings.
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 work with companies such as PG and BP and many other Fortune 50 companies. They can help you reduce freight rates and save money.
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