5 ways to reduce your LTL freight costs

Let's take a look at how you can reduce your LTL freight freight distribution costs

As the logistics field gets ever leaner, many shippers are coming to use less than truckload shipping (LTL) more often. Unfortunately, this can be very inefficient if not done carefully. Whichwarehouse investigates below.

Here are a few tips on saving money on LTL without getting (or providing) worse service

  1. Understand your suppliers and their network. Make sure you have a good understanding of where your suppliers are physically located, and how often they ship to you. Is it possible to reduce delivery frequency to ensure you are shipping fuller loads? This will help you avoid running up against minimum charges.
  1. Keep your freight expenditure visible and accessible. If you develop a reporting system that highlights your LTL transportation spending, you will be more able to spot the places where you can save money. A good third party logistics provider should be able to capture and analyse this data with t TMS, or transportation management system.
  2. Consolidate suppliers wherever possible. Take a long look at your current list of suppliers. You might be getting each widget from the lowest cost supplier, but sometimes you can save money by buying more than one product from a more expensive provider and combining shipments
  3. Improve communication with your vendors. Consider distributing a vendor instruction letter. It may improve the efficiency of your transactions dramatically. It should be explicit as to who must be contacted to request an LTL shipment takes place, and what information the request should contain; at a minimum, it should include origin and destination contact details, freight class, weight, and purchase order numbers. Make sure your vendors understand the proper procedure for requesting an expedited or LTL shipment, and be sure they understand whether they will absorb the costs of selecting a carrier that is not the lowest price option. Also make it clear that failing to authorise this in advance will result in a chargeback.
  1. Monitor vendor compliance, and enforce it.  Your vendors may have agreed to a carrier selection plan, but are they following through? If a vendor does violate your carrier selection rules to your detriment, enforce any chargeback penalties that may apply. All too often these are never enforced, and more expensive carriers are used for vendor convenience and you pay for it.

Ideally, following these tips will allow you to better monitor your vendor network, see where you can save money on LTL shipping without reducing service levels, and keep your vendors better aware of your procedures.


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