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.
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