Are You Overspending on Hidden Freight Costs?
Learn how to avoid hidden transportation expenses by identifying and eliminating unnecessary supply chain costs.
As a rule of thumb, the earlier you book your freight, the lower your freight costs. But what else can you do to drive down your freight costs, even in a market rife with driver shortages and supply chain issues?
Here’s how to reduce your freight costs and total cost of ownership (TCO).
Tender Rejections & Spot Market Rates
If your primary freight provider consistently rejects your loads, it’s time to find a new provider.
There may be legitimate reasons your primary might reject a tender, such as when the destination is remote (e.g. North Dakota or Idaho) and there’s little possibility to book a returning load for an asset carrier.
However, less reputable companies will reject your loads hoping that your secondary carriers reject them as well, forcing you onto the spot market where your primary carrier accepts your load at a price that is 10-20% higher than their contracted rate. This is what we call losing at “The Game of Freight.”
When there’s an issue, we’ll work with you to find alternate solutions rather than force you onto the spot market. A good example of the LiVe value-added approach is our ability to contract underutilized reefer trailers on dry van lanes as a backhaul. Creative equipment solutions can help our customers expand availability and provides carriers new return options while reducing the overall supply chain cost for all involved.
How to Evaluate Your Total Cost of Freight & Potential Savings
If you think you are overpaying for freight, ask yourself:
- How often does your primary carrier turn down your freight?
If this happens more than 5-10% of the time, it’s time to reevaluate your partner. It’s likely that we can reduce your costs on these loads by 10-20%.
Most shippers only track total freight costs (a lagging indicator) and don’t track rejection rates (a leading freight cost indicator). If you don’t know your tender rejection rate, we strongly recommend you start tracking them to see if you have a problem.
- How often do rejected tenders result in a late shipment and what additional costs are incurred?
These costs can be eliminated.
- What are you doing about it?
Managing your supply chain is difficult enough without incurring unnecessary freight costs.
Win at the Game of Freight
To reduce freight costs, it’s important to work with a partner you can trust to do what you contract them to do instead of one that plays games by rejecting your tenders and sending you to the spot market.
LiVe Logistics will work closely with you to help plan your freight so we can better anticipate and prevent problems, provide the trucks you need, and solve issues as they arise. With best of breed logistics technology, 24/7 tracking capabilities, and dedicated account management teams, LiVe goes the extra mile to ensure your loads are delivered on time and without your having to worry about them.