Are Freight Costs Eating Your Profit Margin? Time to Get creative and a Freight Broker/3PL may be able to help!Posted On 7th March 2017
We’ve heard complaints from shippers of general commodities that increased freight rates have just about wiped out their margins, and that the geographical area that they are competitive in has shrunk over the last 5 years.
Here are a few ways to attack those problems:
- Have your Freight Broker consolidate your distributor and key customer freight into daily or weekly Full Truckload shipments, depending on the amount of freight you ship. For the past 5 years, we have insulated a certain commodity shipper’s Midwest and Northeast distributors from ANY freight price increases by adding his various distributors’ freight to the same truck, augmenting with other clients’ freight shipments shipped on the same route and schedule. Logistics savings and no price increases has enabled those distributors to gain market share.
- Have your Freight Broker work up a more efficient way to pack and ship your freight. If you can increase the density of your freight, lower the cost of the actual packaging, or decrease damage claims, it will mean lower overall logistics costs.
- Cut overhead by outsourcing your supply chain/logistics management. Partnering with an aggressive and creative 3PL can bring an immediate and dramatic cut in LTL (to learn more about Less Than Truckload shipping click here) and FTL pricing and eliminate the need for in-house personnel to manage that process. The 3PL can also handle all international import and export shipments so there is no need for your personnel to create or documentation anymore. In addition, the Freight Broker/3PL will bring automation and systemization to these tasks, which will eliminate many costly human errors.
- Cut overhead by outsourcing your Customer Service Department to the Freight Broker/3PL. The logistics process is another chance to win customer loyalty. A 3PL, acting for your company and actively promoting your company, can make that last mile of customer service an especially sterling one. The Freight Broker/3PL will have direct communication with the factory and the shipping dock, and is in the best position to correctly advise the end customer of the likely delivery date. The Freight Broker is your strategic partner and manages your customer’s expectations accordingly. The broker can avoid customer demands that you pay for expedited shipping. Bottom line: A Freight Broker acts as your Brand Ambassador at all times and makes sure the final mile of customer service is a pleasant one for the client.
These are just four methods to address your shipping issues. A careful analysis of your business by a seasoned logistics professional can be the key to expanding the physical reach and competitiveness of your products.