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Navigating Volatility in Shipping Costs: Tips for Supply Chain Managers

December 5, 2023
5 min read
Transportation Management
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Few experiences induce more anxiety in shipping and supply chain managers than the unpredictability of shipping costs. This has been a particularly challenging environment for the LTL industry, with inflation significantly shaping the sector’s dynamics. With an upward trend in LTL pricing, it’s crucial for supply chain professionals to adopt effective strategies for the upcoming year.

Plan for the Long-Term

Proactive planning is key to minimizing annual LTL expenditures. Understanding the specifics of the goods being shipped is essential for obtaining the most accurate and cost-efficient rates. This includes a thorough knowledge of:

  • Timing: Scheduling shipments to avoid peak times can significantly reduce costs.
  • Weight and Density: These factors influence freight classification and, consequently, rates.
  • Distance: The length of the shipment’s journey impacts the price.
  • Appropriate Insurance: Ensuring the right coverage for the value of the goods shipped.
  • Correct Freight Classification: Incorrect classification can lead to substantial unnecessary expenses.

Repeatedly choosing the wrong class can lead to excessive annual costs. Additionally, selecting the most suitable shipping mode for your needs is crucial.

Leverage the Power of the 3PL

Third-party logistics (3PL) providers ship millions of pallets annually for clients nationwide. Their substantial volume spending with freight carriers enables them to secure highly competitive LTL rates, which they then extend to their customers. This means even small-scale shippers can access rates comparable to large-volume shippers. Collaborating with a 3PL offers multiple advantages:

  • Access to Best Rates: 3PLs negotiate the most favorable rates for your freight.
  • Timely and Reliable Delivery: Ensuring shipments reach their destination as planned.
  • Customer Service Support: 3PLs directly handle issues like damage or loss with the carrier.

Embrace Technology and Data Analysis

In today’s digital age, leveraging technology is indispensable. Utilizing advanced software for tracking and managing shipments provides real-time visibility and control. Data analysis tools can help predict trends and optimize shipping strategies.

Build Strong Relationships with Carriers

Establishing a good relationship with carriers can lead to more favorable rates and terms. Regular communication and a collaborative approach can yield long-term benefits.

Consider Alternative Shipping Methods

Exploring other shipping options like full truckload (FTL) or intermodal transportation can offer cost-saving opportunities. Understanding the trade-offs between cost, speed, and reliability is crucial in choosing the right method.

Partner with the Experts

While individual LTL carriers offer quoting and ordering systems, a 3PL like Amware provides clients with a comprehensive Transportation Management System (TMS) like Amrate. This system aggregates quotes from hundreds of carriers, not just one, enabling us to offer LTL clients savings of 30% or more annually. Additionally, Amrate allows clients to import existing carrier rates, which is invaluable for companies with established relationships and preferred rates with individual carriers.

Using Amrate, a cloud-based TMS, simplifies and streamlines LTL quoting and management, eliminating the need to manage shipping software internally. For businesses using an ERP system, Amrate offers seamless integration, allowing clients to access LTL quoting within their existing environment. Other features include live customer service, real-time carrier management, and tracking and tracing for selected carriers.

Contact us today to start saving on LTL, or request a free 30-day trial of Amrate below. This is your opportunity to optimize your shipping strategies and significantly reduce your LTL expenses.

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