22 Ways To Reduce LTL Costs That Don’t Involve a Price Reduction

  • 22 Ways To Reduce LTL Costs That Don’t Involve a Price Reduction

    Anyone who has been involved long enough with the US LTL market knows that is a series of high and lows. The pendulum of power swings from shipper to carrier over time, time and again. Like death and taxes, if the pendulum favors one side, well, given the right amount of time, the pendulum will swing to the other side.

    Things may be different now. Sure, there are signs that segments of the TL market are softening. Inflation is creeping higher, consumer demand may be fading, and e-commerce may not be as white-hot. But the LTL carriers may be a bit more insulated than they ever have. Their pricing discipline has never been stronger. They are managing capacity deliberately. Drivers favor LTL over TL. E-commerce is still growing as more freight is being shipped in smaller lots to put it closer to the consumer. And the industrial sector, which historically has driven LTL, is getting back on its feet. Simply put, the pendulum seems to favor the LTL carriers for the foreseeable future.

    So what is a shipper to do as they continue to absorb escalating fuel surcharges and double-digit price increases? Well, a lot actually. Sure, doing bids may jeopardize your capacity and relationships.  And asking for price reductions may be fruitless. But there are many things a shipper can do to reduce their LTL costs that do not involve a price reduction.

    Below is a list of 22 specific things that can be done. I will cover each of these in detail in the coming weeks and months. And keep these handy, because each of these techniques work well regardless of where the pendulum may hang.

    Shout out to my friends Geoffrey Muessig and Curtis Garrett from whom I borrowed liberally here. Many of these cover the 3 primary cost categories for LTL carriers: Space, Time, and Risk.

    1.   Audit Your Freight Bills
    2.   Know Your Weights, Know Your Dims
    3.   Use A Quality TMS
    4.   Reduce Carrier Time
    5.   Reduce Carrier Space
    6.   Reduce Carrier Risk
    7.   Watch Your Accessorials
    8.   Label And Package Freight Accurately And Clearly
    9.   Provide Advance Shipment Projections
    10.  Fulfill Promised Volumes To Customers
    11.  Pay On Time
    12.  Engage With Carriers to Address Issues
    13.  Hold Shipments To Increase Shipments Picked Up
    14.  Consolidate Shipments
    15.  Choose The Right Carrier(s) To Match Your Needs
    16.  Select Carriers Based Upon Net Costs
    17.  Choose Simplified Pricing
    18.  Educate Yourself About Carrier Rules Tariffs
    19.  Package Your Freight Properly
    20.  Understand Carrier Liability and Shipper Insurance
    21.  Be As Flexible As Possible
    22.  Treat Your Carriers Like a Real Partner

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