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The Yellow Team | Oct. 14, 2022
Freight rates and shipping costs can fluctuate, depending on your industry, available trucking capacity and other market forces.
Many of these factors are out of your control. However, there are several practices your transportation team can adopt to maximize your shipping dollars, reduce the risk of cargo claims and damaged shipments, and streamline the shipping process. These steps include standardizing the way you pack a shipment, paying close attention to what’s documented in the bill of lading and choosing a carrier with the most direct routes to deliver your shipments.
Here are 15 ways you can start saving on your LTL shipments:
Always make sure all packaging materials in your shipment meet the requirements set forth in the National Motor Freight Classification (NMFC). Here are some tips on how to package your freight and minimize damage.
• Pack all freight with minimal empty space to avoid having your shipment reclassified at a higher freight class because of low density. Always maximize your space on the pallet.
• Make sure all goods are packed securely with protection on all sides to reduce the chance of damage to the shipment.
• Hone your packaging process. Look for ways to increase the density of your freight in order to provide a better return on your packaging dollars.
• Reuse packing materials. Not only is it environmentally friendly, but it’s cost-effective to reuse bubble wrap, packing peanuts, air pillows and other materials.
Stack your freight securely on pallets, ensuring that cartons do not hang over the edges of the pallet. Some effective ways to do this include:
• Create pallets that have flat tops.
• Pack to the pallet edge and the height requirement.
• Attach freight to the pallet through shrink wrap or other means. This keeps your freight secure, eliminates sliding and the risk of damage.
• Use lighter but stronger packaging materials that won’t budge or expand. This ensures that the dimensional weight remains exactly as you have calculated.
• Never use freight cones, or “pyramid” boxes on the top of the pallet to prevent stacking on the pallet. This interferes with trailer volume efficiency and can lead to extra charges from your carrier for the unusable space.
To avoid someone else’s freight being stacked above or below your pallets, take steps to fully use floor-to-ceiling space in the trailer.
• Freight trailers can accommodate pallets as tall as 96 inches. If your pallets are stackable, keep them to a 48- to 50-inch maximum height. This ensures your pallets can be loaded together and helps the carrier use all the trailer space.
Make sure your freight’s destination is a direct service point for your carrier (or be sure your pricing applies on interline points). Also, make sure that pick-up and delivery requirements are stated clearly in the freight quote. The following can lead to invoicing surprises if not stated up-front:
• A liftgate for a limited-access delivery.
• The need for increased use of handheld driver devices or third-party software for shipment tracking.
Knowing the correct mode for your freight can eliminate wasteful spending. For example, if you have a single piece that weights 30 pounds, the cost of shipping it via an LTL carrier will be more than that of a package carrier.
• If you have enough freight to fill an entire trailer, full-truckload shipping will be cheaper than LTL.
• For some LTL carriers, spot rate volumes may be available for shipments that take up as few as three pallet spots. This may be lower than an LTL rate, particularly if it is a backhaul shipment.
Always enter the exact weight for the freight – including the weight of the pallet. Rounding the weight to broad numbers will guarantee that the carrier will re-weigh your shipment.
• Underestimating the weight of your freight can lead to lower density, which may move the freight to a higher, more expensive shipping class.
List the correct NMFC item number on the bill of lading (BOL), including the proper sub. Include the actual class of the shipment (not a FAK class) and the correct NMFC description. Failure to include this information will lead to the carrier sending your freight through a dimensioner and/or a weights and inspection supervisor.
• Getting your freight class wrong can be very costly. Always take steps to classify your freight correctly.
• Always triple-check the BOL before signing.
Single bill pick-ups are more costly for carriers and shippers. If possible, arrange for a pick-up of two to three shipments. This practice avoids a single-shipment charge and allows you to spread the cost of the pick-up across multiple shipments. Also, combining shipments is good for the environment and lowers the carbon footprint associated with your freight.
• Try to ship more product less often. Shipping six pallets once will be cheaper than sending out two pallets on three different days.
• Shipping a day before or after peak days can yield measurable savings and is an option if you ship non-consumer products.
• Before pick-up, inform the carrier of how many pallets you are shipping. This ensures the carrier provides a trailer with enough room for your freight.
• Ship early to avoid holiday crunches, delays and expedited costs.
Have your freight packed and ready to go before the scheduled pick-up. This reduces waiting and loading time, and allows the driver to get back on the road as soon as possible. Time lost when freight is not ready is money wasted.
• If you gain a reputation for loading quickly, that’s extra incentive for a carrier to work with you and may lead to more favorable pricing.
This ensures your load is more likely to become a backhaul shipment with a lower rate. Also factor distance and convenience into your shipping decisions.
• Consider a carrier that offers cross-docking velocity, especially if you need to forward store products to closer locations to support your customers’ same-day or next-day consumers.
Understanding your liability coverage and what party is responsible in the event of damages or a cargo claim can help lead to reductions in losses.
This can help you avoid paying supplier mark-ups and taxes on inbound freight. After converting your purchase orders to instruct “inbound collect,” be sure to monitor supplier compliance to ensure approved carriers are being utilized.
Forge a “vested partnership” with a transportation management provider, which can lead to cost savings.
• Sharing your data can enable the provider to find freight optimization opportunities.
• Volume commitments can lead to savings and are more efficient than running frequent RFPs and spreading your freight across too many carriers.
• Your partner may provide free access to a transportation management system (TMS) portal, helping your team more effectively manage your shipping.
Work regularly with your carrier, freight brokerage and other stakeholders in finding ways to optimize your shipping.
• Hold customer-partner reviews and educate your partners as to what is happening in your industry.
• More collaboration can strengthen your partnership with carriers or other transportation providers, empowering them to offer ideas and strategies that lead to more competitive advantages.
Integrated programs like application program interface (API) can eliminate paperwork and lead to more effective, efficient shipping.
In short, cost savings can be realized through a disciplined approach to shipping. Take great care in how you weigh and pack your shipments. Take steps to optimize your shipments’ density and space. Know exactly what’s documented in the BOL, and how the carrier plans on delivering your freight. Finally, explore a partnership with a transportation provider you can trust that may reduce your spending on transportation.
For more about good shipping practices, read our articles, “5 Basic Steps to Shipping Freight,” and “Demystifying the LTL vs FTL Freight Shipping Decision.”
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