By Jen Deming, PartnerShip
Shipping expenses are one of the top expenditures for most businesses, which comes as no surprise because it can be challenging to determine how to reduce those costs. Many common shipping practices sabotage a business’s ability to get ahead by protecting their bottom line. What are some important mistakes to avoid when figuring out how to reduce your shipping costs?
It’s not always what’s inside that counts
Proper packaging is critical in helping decrease costs. We are all familiar with the risk of damages — used boxes with holes or older labels still attached are asking for trouble. Make sure you’re using the correct type of packaging materials for the product being moved. If you have more than a few boxes, it’s a good idea to palletize all of them together and shrink wrap. Freight shipments are loaded and unloaded at several terminal stations in route, and palletizing can keep them from being separated or lost along the way. It’s critical to use the right size packaging to help shippers reduce costs. Make sure you’re packaging your product with enough space inside to include proper cushioning, but not so much as to allow room for shifting or that makes it difficult to handle — a carrier will charge for that, too.
Know your customer’s location
Are you aware whether or not your receiver has a dock? How about a forklift? Are you delivering to a school, church or another hard-to-reach area or location that risks being designated as limited access by the carrier? Can a 53-foot dry van maneuver around that location? Are hours of operation restricted for pickups or delivery? Every one of these variables can potentially make a delivery more difficult and damaging to your bottom line due to costly accessorial charges. Keep in mind, the harder it is to complete delivery, the more you need to prepare for added fees. Planning ahead and knowing exactly what your carrier will charge for additional services will help keep shipping costs where they need to be.
Don’t assume the delivery estimate is a guarantee
Shippers need to remember estimated delivery day is just that — an estimate. Just as with your every-day postal service provider, business days are those in a work week — weekends and holidays are not included. A more reliable measure to figure out shipment delivery is to take a look at transit times. When scheduling with a carrier, be sure to ask for this rather than relying on estimated delivery date. That way, you know if your five-day freight transit picks up on Monday and an unexpected storm kicks up along the way, a one-day transit delay actually results in a Monday delivery. Keep things safe by factoring in a couple of extra buffer days when communicating to your customer. If you’re truly in a crunch, shop the different expedited service options among carriers, but be aware anything last-minute will cost, especially in the winter and around holidays. Avoiding rush shipments is always the quickest way to reduce shipping costs.
It’s about 500 pounds...ish?
The old adage, “measure twice, cut once,” isn’t just a lesson in being diligent — it’s an important rule by which shippers should live. Guessing just doesn’t work in an industry where being a few pounds or inches off can potentially double your freight bill. Carriers check weight and dimensions once, twice and once more just for fun with calibrated scales every time your pallet is picked up by a forklift at a terminal. If the weight of your shipment doesn’t add up to what’s on the bill of lading, you can pretty much rest assured you will be billed for the difference.
If you’ve already quoted and billed your customer on shipping estimated based on inaccurate measurements, you’re playing a risky game. Be sure your warehouse scale is calibrated and reset often. If you don’t have a large enough commercial scale at your place of business, measure each component of your load (including pallets) and add them up. Be as thorough and accurate as possible to avoid any surprises.
Handing the reins to your vendor
You may love your vendors, but lots of businesses take for granted the cost-cutting potential that’s available by managing their own shipping. If you can do so, it pays to take a look at what carrier and service your vendor is using to deliver your freight and take control of inbound options. Some carriers have more competitive lanes in certain regions, while others may offer additional options and less expensive fees for extra services your business may require. If you are responsible for inbound freight costs, it’s worth it to measure which carrier and service really work best for you. The additional responsibility doesn’t have to be a headache, either. By working with a quality 3PL, you can ensure you’re using the right carrier and correct service level at the most competitive price. It’s a surefire way to make sure you’re reducing shipping costs where needed.
Figuring out how to lower shipping costs starts with some simple best practices. Double-checking spec’s, being knowledgeable about your transit and locations, and researching carrier options help keep you prepared and proactive about avoiding higher freight costs.
PartnerShip can help NTEA member companies save on inbound, outbound, small and large shipments through its NTEA Shipping Program, a free member benefit. To speak with a specialist or learn more, call 800-599-2902, email sales@PartnerShip.com or visit ntea.com/partnerships.