Tuesday, May 11, 2010

Freight Rates on the Rise - Knowing your options

With capacity continuing to tighten, increasing fuel prices and freight demand growing we are continuing to see truckload, intermodal and container prices on the rise. The good news is that there are options to help manage and potentially even reduce your freight costs even with this grim outlook. Below, I've outlined just a few different freight options that may potential reduce freight spending.

Lead Time - Freight rates vary daily/weekly/hourly. Giving your 3PL flexibility on the pickup date and plenty of lead-time before the shipment must pickup will allow for the best chance for the lowest rates. Carrier rates vary based on headhaul and backhaul lanes. For example: a shipment loading out on a Monday morning is more likely to be a head-haul lane for most carriers who are just starting their week on the road. If you can catch a carrier who is trying to head back home for the weekend later on in the week, you are more than likely to land a better rate.

Consolidate - Don't want to risk damage with an LTL carrier or have non-palletized product? With the right variables, your 3PL will most likely be able to utilize a consolidation carrier for your less than truckload shipment. Good news is you pay for a specified number of feet, the product is loaded and not touched or moved until reaching your destination and you receive a discounted rate off of the full truckload price.

Transit Time - Have a shipment that has to pickup today but you have flexibility on the delivery date? Intermodal rail can really offer significant cost savings for heavy and long-haul shipments. Transit times can vary, but you can expect a cross country run from LAX to NY to run about 7-8 days with savings averaging about 20-30% over traditional truckload services.

Explore other freight modes - Do the words 'Air Freight' make you cringe? Remarkably, Air Freight costs sometimes come in less than LTL or Hot Shot rates for expedited shipments especially those of low dimensional and actual weights. Before automatically dismissing the possibility of Air Freight or other freight modes that might usually be considered too costly ask your 3PL for your freight options and compare freight quotes. You might be surprised with the outcome.

For more information or to request a custom freight quote, please feel free to give me a call personally at 877.298.7359.