As a shipper, finding ways to streamline your supply chain and freight shipping costs in your business is vital. Working closely with your shipping partner to align on your business priorities can help streamline your supply chain, improve efficiencies, provide a better customer experience and reduce shipping costs. An example of how your shipping provider can help support your business is with freight consolidation options.
To start, work with your carrier on your business’ shipping goals. Once you have that information, consider applying these tips and solutions to get the most value from each shipment.
What do we mean by freight? Any shipment that exceeds 150 lbs is considered a freight shipment, and is shipped on pallets rather than in a package.
Effective Strategies for Lowering Freight Shipping Costs
Communicating with your carrier and having a good understanding of their freight shipping rates is crucial when it comes to calculating and reducing your shipping costs. You’ll need to work together to plan ahead. This means forecasting your annual shipping volume, communicating the specific needs of each shipment and working together to find the right solutions and shipping combinations. For example, combining freight and courier options, consolidating freight shipments and knowing when to use a truckload (TL) and less-than-truckload (LTL) services.
For freight, shipping prices don’t just account for distance and weight. There are often fees associated with additional services and shipping options such as border crossing, specialty services like brokerage, storage requirements and delivery/pickup services like tailgate. Informing your carrier when these additional services and requirements are needed well in advance will help them deliver your goods without a hitch while also giving you an accurate calculation of your estimated costs. For example, during peak shipping, it’s important to discuss your shipping needs in advance so both you and your shipping partner have time to prepare. This can also help reduce extra costs like surcharges. ways to reduce freight costs
Why choose expedited freight?
Understanding when to choose between expedited freight transport is another way to help streamline your supply chain and manage costs. Many carriers offer two types of freight shipping: A more cost-effective option and a much faster option. But if you’re looking to get your shipment to its destination quickly and access the latest features like online tracking, then expedited truckload (TL) and less-than-truckload (LTL) freight is the better choice even if it’s a pricier option. Depending on your needs, you’ll want to consider both options before you ship.
Bulk shipping and potential price concessions
Did you know that carriers tend to provide price concessions when customers ship in high frequencies? Depending on your carrier, high-volume shippers tend to have the ability to enter into a contract agreement with negotiated freight shipping rates. These rates can help you save costs when you’re shipping in bulk throughout the year and reduce pricing volatility. Entering into a contract with negotiated rates so you can ship more frequently is just one way a carrier can optimize your freight shipping costs and can even help enhance your brand loyalty. By making frequent shipping cost effective, you’re in a better position to provide your customers with their goods exactly when they need them.
How does weight affect the calculation of your freight transportation costs?
It’s usually a given that the weight of a shipment will affect its price, but how it’s calculated into your shipping costs depends on your carrier. The higher the weight of the shipment, the lower the per 100-pound rate becomes. This means it’s usually more economical to group heavier items together on a single shipment.
Reduce dunnage and safely secure your freight shipments
Talk to your carrier about reducing dunnage (packaging supplies). Asking for packaging advice from your carrier means that you can still pack your goods securely while minimizing the costs spent on supplies. On top of that, packaging that’s the exact fit for your goods reduces the total weight of your shipment (making it more cost-effective) while also being a more sustainable shipping solution. For example, Purolator has guidelines for palletized freight, and non-fragile and fragile shipments.
Most customers want sustainable packaging solutions
Opting for more sustainable packaging supplies for your shipments not only helps the environment, but wins over your customers, too. Purolator’s research on sustainable shipping discovered the value and importance that customers have on purchasing from a company with sustainable solutions.
Here’s what customers want shipping companies to consider:
Want the full story? Read our research paper on: How Customer Expectations are Shaping Sustainable Shipping Practices.
Shipping across the border
When sending freight shipments across the border, you will need to include the costs of:
- Customs clearance and forms
- Border processing
- In-bond freight handling services
While cross-border shipping usually follows a similar process to domestic shipments, the addition of customs clearance and duty and taxes needs to be considered. The right freight carrier will be able to support your business with cross-border shipping solutions to ensure a successful and smooth border crossing. At Purolator, we support our cross-border shippers with Purolator Trade Assistant (PTA), a digital tool that makes customs clearance a breeze.
Find out more about what U.S. exporters need to know to avoid delays.
Consider specialized freight transportation services
When it comes to the transportation needs of industries such as industrial manufacturing and suppliers, healthcare, technology and more, you may need to ask your carrier for specialized freight services. These services are designed for items that are oversized, overweight, fragile or temperature sensitive. Planning for specialized freight services beforehand will allow for a more efficient shipment while also giving you a more accurate read of the total cost. These services are usually needed when you’re shipping items that are classified as dangerous goods or for temperature-sensitive deliveries:
- Shipping dangerous goods—If you’re shipping items that are classified as dangerous goods, be sure to provide your carrier with the appropriate freight documentation as soon as possible so they can arrange for the transportation on their end. Be aware that shippers need to be approved by their freight carrier before they can ship dangerous goods.
- Protect from freeze*—If your items are easily damaged by colder temperatures, then ask your carrier if they offer a protection from freeze freight service. This is a heated truck that prevents your goods from going below zero degrees Celsius, and is usually offered during the colder periods of the year (from November to April).
Choose the right mode of freight transportation
There are typically four modes of freight transportation to choose from (ground, rail, ocean and air), each with their own benefits and specialties. The right carrier will let you choose from all four modes of transportation, so you’re always getting the right solution for your shipment.
- Ground freight is the most cost-effective solution while also being the most flexible for local, over the border, long haul or short haul shipments.
- Rail freight offers reliable transit times, and can move goods in large quantities while still being cost effective.
- Ocean freight is an ideal international freight shipping solution that can carry the heaviest goods in the largest quantities, while still being a comparatively economical option.
- Air freight is the fastest option and, due to the nature of air travel, requires less documentation while providing more security. This makes it a great solution for international freight and urgent shipping.
Optimize reverse logistics for your freight supply chain
An efficient returns management process minimizes the impact on your bottom line while boosting customer satisfaction. The right carrier can help you create a returns program that seamlessly integrates with your current freight supply chain.
After all, an efficient returns solution not only helps you build customer loyalty, but also supports your cost-saving efforts to optimize freight shipments.
How reverse logistics benefits your bottom line
It can be easy to think that reverse logistics are a negative outcome, resulting in products returned to your warehouses and wasted time and resources. However, there are ways to turn this outcome around, making customer returns a way for your business to save costs and resources that help optimzie your freight supply chain overall.
- Lower supply costs—Returned goods can be reused and recycled entirely or for their valuable parts. This allows items in storage to become a source for future shipments, saving the money you’d spend on purchasing more supplies. Valuable parts can even be used to repair goods that have already been sold to customers—a solution that can save costs on electronics repair.
Learn how reverse logistics for electronics repair can be a seamless cycle that supports customer fulfillment
- Improve your brand reputation—Customers are willing to pay more for products and services by freight shipping companies that are sustainable or focused on green initiatives and have an eco-friendly reputation. Implementing a reverse logistics program in your supply chain, and effectively recycling or reusing returned goods, is a way to build loyalty with your current customer base and attract a growing audience of eco-friendly consumers. While this doesn’t directly reduce freight costs, it can improve your bottom line.
- Focus on shipping, not repairing—Reverse logistics requires space. Extra warehouses and storage units to store returned goods awaiting recycling can raise the cost of the entire process. That’s why finding the right reverse logistics partner to take care of the returns process for you is so important. They’ll take on the costs of storing, managing, recycling or disposing of your returned goods. This lets you pay full attention to what your business does best—making successful sales and shipping goods to customers.
Preparing to ship freight for the peak seasons
Freight prepping and shipping during peak seasons can be a challenge without the right preparations. And if you’re not prepared for the rush, the shipping costs (and potential for delay) can take a significant toll. To beat the peak season rush and get your shipments delivered on time for a more economical cost, be sure to take these tips into consideration:
- Consolidate your shipments: Freight consolidation is when a carrier fills a single truck with several less-than-truckload (LTL) shipments delivering to the same region. While this can be a good cost-saving strategy to follow on a regular basis, it is especially vital during the peak seasons when getting orders out on time is crucial. Some carriers even offer to consolidate both courier and freight shipments together on a single truck.
- Choosing LTL or TL: Your ground transport of choice should always fit the size and number of items you’re shipping to get them to your customers on time while still being cost effective. When you don’t have enough goods to fill up an entire truck, shipping LTL is a more economical option. However, if you’re shipping in bulk and your items fill an entire truckload (TL), then shipping TL makes the most sense. Learn more about LTL and TL freight shipments, and which is the best option for your business.
See how Legrand used freight and courier consolidation to optimize distribution.
- Inform your carrier in advance: Send any details available to your carrier, including dedicated appointment times, value-added services required and pick up/delivery dates before peak season starts so they can accommodate your needs in time. Delays are often a result of excessive time spent on the dock because of shipments that aren’t properly packed, inadequate dock equipment, inaccessible dock entrances and other similar issues that come from a lack of communication. The more shipment details you provide your freight carrier, the more they can support its delivery. For example, if you don’t have an adequate dock, you’ll want to arrange for tailgate services.
- Ship on the off season: It’s an obvious solution with a direct impact on cost savings, but it’s one that requires you to plan ahead. Shippers who transport freight during the off season typically see significant savings. However, the off-peak days when your carrier has capacity may not align with the timing of your shipments. That’s why it’s always important to work with them closely at an early stage, so it’s easier for you to accommodate to their schedule.
- Order packaging materials: Get the majority of your packaging materials early to beat the rush and possible shortage during the peak season. You’ll have more time to properly pack your freight shipments, minimizing the risk of freight transport delays due to damages, and delays during loading/unloading due to improperly packed goods.
- Choose strong boxes that can withstand stacking
- Purchase sustainable and cost-effective packaging materials
- Fill all empty space in your boxes with filler material when needed
- Seal each box to be palletized using the H-style taping method
- Select a damage-free pallet that’s at least standard industry size (48” x 40”)
- When loading your pallet, place the heaviest boxes on the bottom and ensure you meet maximum weight limitations
- Wrap your pallet with high-quality shrink wrap
- Ensure your packaging label is visibly located on the side of the pallet
Get the most value from every freight shipment
Check off each step as you go through the shipping process. Once all steps are checked off, you’ll know that you’ve done everything on your end to reduce freight costs.
Have you worked with your carrier to understand packaging requirements and reduce dunnage?
Has your carrier offered you with packaging options that are more sustainable and cost-effective?
Did you provide your carrier with details on the shipment’s origin, destination and receiver?
Did you request tracking from your carrier?
Are you bulk shipping to leverage price discounts for shipping weight?
Have you asked your carrier about freight consolidation to optimize your supply chain?
Does your carrier have intermodal transportation options (combining multiple transportation modes for a more economic and sustainable solution)?
Does your carrier provide the option to ship on off-peak days or seasons at a lower price?
Do they have a comprehensive reverse logistics strategy that fits your supply chain’s needs?
Have you informed your carrier about any value-added, border-crossing or specialty services you require?
Choose a freight carrier with a vast network
The larger your carrier’s freight network is, the more options become available to your supply chain. This can translate into savings because you’re not using multiple carriers for different shipments. A bigger network lets you ship to customers in remote regions, and gives you the flexibility to choose from a variety of pickup and delivery locations.
Here’s where Purolator’s freight network can take your shipment:
Go with a carrier who offers both freight and courier services
If you’re shipping pallets and packages, choosing a carrier that can handle both services has a number of benefits. Instead of going with multiple carriers to handle your freight and courier needs, which can potentially increase overall costs, choosing one provider who does both can help you:
- Enter into a contract agreement for negotiated rates for both services
- Reach more customers faster as both freight and courier shipments are consolidated
- Optimize your supply chain by making it more efficient and reducing overall costs
Look to emerging shipping trends for new solutions
Although our current landscape has the logistics industry faced with supply chain shortages and other challenges, solutions are potentially on the horizon. More logistics companies are looking into ways to surpass current roadblocks, and some of these solutions may help drive down the current cost of shipping.
Streamlining the supply chain
We’ve entered a stage where many countries have adjusted to living life normally even though COVID-19 is still around. But what does that mean for logistics? It means that lockdowns and movement restrictions in many more parts of the world are being lifted. The result is that supply chains are going back to their pre-COVID schedules. As availability increases and global trading routes re-open, you’ll have greater flexibility and more options on how to streamline your supply chain route to be more efficient.
Automated shipping solutions
Automation is on the rise. Carriers are now leveraging technologies such as connected logistics to monitor inventory throughout the shipping process and QR code scanning to easily print digital shipping labels. In the future, the industry is looking to incorporate more tech in its strategic operations—such as AI, machine learning and blockchain technologies. It’s predicted that blockchain-powered tools can save the shipping industry $38 million USD annually. Future solutions, like Purolator Your Way, will let customers track shipments with full visibility, while personalizing each delivery to their preferences.
The number of consumers willing to pay more for sustainable products and practices has increased by an average of 8% in just one year (2021 to 2022). While fewer consumers are aware of how sustainability affects transport, carriers in Canada are striving to hit net-zero emissions by 2050. While this may incur higher short-term costs as logistics businesses adapt, in the long term the costs of these transportation changes can be balanced out by the growing interest from consumers, particularly from Gen Z. We’ve put together a research-based report based on this topic. Learn how customer expectations are shaping sustainable shipping practices.
Purolator is investing in sustainability to meet net zero by 2050.
You’re now equipped with the basics on how to reduce the cost of shipping of freighted items for your business. By applying our practical tips, your business can focus on what’s important while a carrier supports you without taking too much time or resources. You can also start looking to the future and investing in shipping trends that will evolve with the potential for further savings down the line.