Shipping freight at cut rates can be tempting, but like most services, you get what you pay for. Shippers trying to navigate a volatile market are constantly balancing cost concerns with the need to ensure their freight arrives on time and intact. Working with an experienced logistics partner like Shaker Logistics can help surface creative solutions that maximize benefits.
We touched base with Matt Janeski, Director of Logistics Services at Shaker Logistics, to learn the top 5 things that shippers can do to optimize their shipping and save money in the long term.
1. Trust Your Logistics Partner
Matt’s first piece of advice to shippers is to put their trust in their logistics partner, completely: “Leave it up to us. Shippers sometimes unintentionally constrain themselves to a pricier option because they are hesitant to allow their logistics partner to apply their expertise and find more creative, cost-effective ways to make the shipment. Trust can go a long way in a partnership and benefit both sides.”
While it’s true that shippers are the experts when it comes to their products and their customers, as logistics partners we are the experts in shipping. We spend every day analyzing market conditions, tracking spot and contract rates across various modes, and use our decades of experience to inform any options we present to the shipper. Shaker’s reputable logistics specialists act with integrity and take on responsibility for the success of the shipment. If a shipper withholds critical information about the delivery or the freight from their logistics partner, they prevent the logistics partner from analyzing the shipment holistically, which can limit our options in finding cost-effective solutions.
Most of the time the best option is not the cheapest one. Cheap carriers cut corners on service and are often unreliable or unresponsive. A low rate for the shipper can become a costly mistake if the freight is damaged, stolen, lost, or there’s a complete failure of service. Shaker’s team knows how to price in risk premiums to rates that appear low and can eliminate options that aren’t truly viable. We work with shippers to understand the cost or risk of a missed or delayed shipment and put that inthe context of the overall shipment cost. If you lose a customer due to a delayed product, but save $100 on the freight costs, is that a win?
Unfortunately, there are still shady actors in the freight industry today, and in many cases, shippers are right to be suspicious. To those shippers, Matt said: “We want our customers to trust us with their freight. If a shipper is working with someone they can’t trust, I’d encourage them to look for a partner like Shaker for honest service and a true partnership.”
2. Be Flexible
Flexibility is key if shippers want to save money with cost-effective options. Matt, who has decades of experience in helping shippers make optimal choices, said, “When there is a situation where shippers have the opportunity to be more flexible with pickup dates, transit times, and delivery windows, that will save them money. For example, it can cost tens of thousands to ship the next day with an air cargo carrier, but you can wait 20 hours and save thousands to ship on a van. It should be a conversation you have with your logistics partner to determine how and when there’s room to reduce costs.”
As a rule of thumb, slower modes of shipping are cheaper. If a shipper has a wide delivery window, moving the freight by rail will take more time but can be up to 50% cheaper in some cases. Similarly, less-than-truckload (LTL) shipping is a good option that will take more time but save money. However, shipping LTL can increase the chance of damage as the freight will be moving on and off the truck several times throughout the transit period, which is more advisable for shippers who don’t have particularly fragile freight. Partial truckload can be another affordable option for shippers who are shipping fewer pallets. If a shipper only has ten pallets to send to their customer, they can pay for that amount of space on the truck and authorize the carrier to contract the rest of the space to another shipper sending freight to the same city. For this option, all parties involved have less control over the shipment, but the shipper saves money by essentially splitting the cost of the truck with another business. Each option presents itself with different benefits and drawbacks but being flexible opens doors for shippers to efficiently use their shipping budget.
3. Plan Long Term
In any industry, last-minute transactions are the costliest. This is especially true in the logistics world when a shipper’s need to make an on-time delivery can leave them vulnerable to costly premium charges.
“Too often we see shippers eating costs on last-minute shipments,” Matt said. “If you are trying to move anything same-day, or even pick up early the next day, you will most likely need to pay the carrier a premium. Give your logistics partner a few days’ notice for a successful shipment at a reasonable price. For common freight, 24 – 48 hours’ notice won’t pinch your price. For a more specialized shipment, 3 days lead time is sufficient.”
Shaker knows well that the unexpected can and often does happen in logistics. Even shippers who plan ahead can have service failures that require quick coverage to make the delivery on time. This is when it is critical to have an inventive logistics partner like Shaker, with strong carrier relationships, we can leverage to get a more manageable recovery rate. While it will still cost more than the initial service rate, the shipper won’t be left to fend off bad actors looking to take advantage of a tricky situation.
4. Consolidate
“A good logistics partner will be able to tell a shipper where they can consolidate shipments to reduce costs. Shippers often miss this opportunity because they don’t know it’s a possibility. The more a shipper communicates with their logistics partners about their planned shipments, the more their partner can help them,” Matt said.
Depending on the freight’s size and special requirements, shipments going to the same location within a few days of each other can be consolidated. For example, if a shipper sends 8 pallets of paper to Chicago on Tuesdays and Thursdays, consolidating those shipments into a single load will reduce cost. There are also options to consolidate on a multi-stop load, putting different orders on a truck that travels a lane near the different delivery destinations.
5. Contracting your freight
For shippers who regularly send freight along the same lanes, contracting their freight to a trusted logistics provider can reduce costs in the long run. Using the spot market to book a carrier when rates are low can be satisfying at the moment, but the spot market is volatile and prone to dramatic shifts. Shippers may find themselves paying double the amount they paid last week for an identical shipment, just because there is less capacity available on that day.
Matt advised shippers to think about long-term savings and said, “If you know you’ll ship 35 times in a year, let your logistics partner present rate options for that year. Contract rates can potentially be higher than the spot market rate today, but when the market flips and rates increase, you’ll be insulated from those extreme changes.”
Growth and savings are long-term goals that require long-term solutions and thinking. By using these five practices to reduce costs, shippers can collaborate with their logistics partners to use their shipping budget more efficiently and avoid unnecessary spending.
Invest in Reliability with Shaker Logistics
Above all, a reliable logistics partner who provides cost-effective solutions is worth the investment. Reach out to the team at Shaker Logistics now for inventive logistics solutions!