Top 10 Strategies to Reduce Freight Cost

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Amit Maheshwari
Amit Maheshwari, Softlink Global CEO

Implementing cost-cutting measures could be taken up by companies for many reasons. Usually considered the ultimate step during dwindling revenues, cost-cutting can also be implemented to increase profit margins.

 

In the freight forwarding industry, the number of costs is aplenty. But not all costs are controllable. Having multiple costs allows you to reassess the underlying factors influencing them. Once you have identified the underlying factors, the next step is to streamline and incorporate them into your processes.

 

It might be a lengthy process to comprehend how to evaluate the scope of optimizing costs. A freight management software becomes useful to view insights into your earnings and spending.

 

Here are 10 ways to reduce your freight costs and have more freedom to better your service.

 

  1. Maintain Relations with Carriers

Businesses that run on trust run longer. Carriers are looking to fill in their containers and freight forwarders can provide the same and benefit mutually. Better relations make it easier to negotiate lower rates with carriers.

 

  1. Look for Off-Peak Times

Freight and container rates are skyrocketing. Attempts to bring down the rates may be futile on days of demand. But you may just be able to negotiate lower rates on non-peak days. Software reports tracking rates act as a guide to be a better demanding position with carriers.

 

  1. Evaluating Your Mode of Transport

Autonomous and electric vehicles are changing the landscape of transportation in the wake of sustainability. Evaluate your options to check for cost savings.

 

  1. Expand Your Network to Consolidate Better

Forwarding is a complex industry that attempts to maximize the use of resources. With a wide network, you have more scope to consolidate and file complete occupancy of containers.

 

  1. Multi-modal Transport

Using just a single mode of transportation could be easier to book, but it may not be too pretty for the profit. Consider a combination of rail, road with sea to unlock larger benefits.

 

  1. Explore Carriers

Establishing long-term relationships with carriers is a must. But getting multiple carriers onboard lets you offer flexibility to your shippers.

 

  1. Improve Visibility of Costs

Many companies don’t realize how much loss they have incurred until it affects their financials. Tracking the payables and receivables of all transactions in real-time with freight management solution prevents revenue leakages.

 

  1. Reduce Fines and Overshooting Free Time

Demurrage and detention, if not monitored, can add to unnecessary expenses for you and your customers. Save the troubles and penalties to always deliver per planned schedule.

 

  1. Zero Errors in Compliance and Processing

Accidental or duplicate payments can account for up to 1.5% of the shipper’s expense. Switch to freight software for error-free billing and invoicing.

 

  1. Stay Organized

Being in control reduces the probability of error-prone operations. Get real-time visibility of unattended sales quotations, pending documentation, invoices, and operations by implementing freight software.

 

Be Ready for New Challenges

A robust software streamlines your processes so you can manage your operations and keep costs under control. With data insights, you can adjust transportation schedules and gain the power of negotiation with carriers. Keep in mind the pandemic-induced challenges that may occur in the future and work with cloud-based ERP to continue operations from anywhere.