How to Avoid Emergency Expedited ShipmentsPosted On 6th January 2016
Expedited shipping expenses should be a maximum of 3% to 5% of your overall freight budget, but often companies spend upwards of 20% of gross freight purchases on Expedited and Guaranteed Services. Most of these expenses can be avoided. Let's talk about how.
Transparent, honest, and FAST communications with your client are a must in order to avoid making your company responsible for expedited shipping costs. Everyone must understand that the consequences of late delivery for the customer are NOT your business’s risk.
Take a stucco manufacturer, for example. If the stucco is not delivered to the job site on time, it should not be the manufacturer’s responsibility to pay for the contractor’s downtime. The customer service or sales staff must communicate realistic shipping and delivery dates, and must explain that delays can happen and that any costs associated with the delay are not your company’s responsibility. If the client understands this from the onset, and a delay does occur, they will be more inclined to pay for expedited shipping.
If you are a manufacturer, encourage customers to order larger quantities to reduce the number of shipments. Larger shipments reduce the landed costs of your product while at the same time providing a supply cushion for both you and your client. This helps avoid panic and expedited shipments.
If you are an importer, consider increasing from 20’ to 40’ containers. If you order 40’ high cube containers, you might be able to pack 300% more product inside.
There is no need for 5% of your shipments to eat up 30% of your logistics budget. Communication is key!
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