It’s a good day.
You received a huge order!
You don’t want freight costs to eat away at your profit.
What are your options?
Normally, you would consider one of the traditional options such as discounted LTL, spot-quoted LTL or paying for a whole truck. A variety of factors contribute to the price of each option. These factors can include freight classification, stowability, product value, temperature control, desired transit time, and others.
When you get down to it, the least expensive option on a per pound basis is usually paying for a truckload…even if you don’t need the whole trailer.
What if you had software that could capture the benefit of the truckload rate AND reduce the shipment cost even further?
Optimization software which has been commercially available for a long time is becoming readily accessible to small and medium shippers. This process involves matching up compatible shipments, from one or more shippers, to share a truck and apportioning the costs appropriately across orders.
Large shippers have placed inventory with third party warehouses looking for, amongst other efficiencies, this exact type of opportunity. As a smaller shipper, you may not have the volume for this type of luxury. You can still achieve the additional savings without risk or pain.
Here’s how it works.
The software analyzes all of your shipments scheduled to go out over the next few days. The software quickly calculates the costs of the traditional options in concert with shipment characteristics and delivery requirements. It selects the best mode and cost for each shipment and then figures out how cost can be reduced with enhanced service if multiple shipments are able to share one truck.
The idea is simple.
Pay for a whole truck but split the cost across separate and distinct orders.
Now, how much more could you save if the software could match your heavier shipments with those of other area shippers?
Lead Logistics Providers advocating specifically for small and medium shippers now employ this type of software enabling simultaneous optimization across thousands of shipments and hundreds of eligible shippers. The results offer reduced rates, faster transit times with less handling which means a lower probability of loss and damage.
It’s a really, really good day.
That huge order just got more profitable!
Samuel R. Polakoff is president of TBB Supply Chain Guardian. TBB is a 66 year old lead logistics provider specializing in small, medium and early stage companies. TBB manages supply chain functions for companies around the world. Sam’s industry insights have appeared in the following publications: The Journal of Commerce, Traffic World, Inbound Logistics, The Baltimore Business Journal, The Baltimore Sun, The York Daily Record and The Central PA Business Journal amongst others. Sam currently authors The Supply Chain Guardian Blog. To learn more about creatively optimizing your transportation costs, contact the author at srpolakoff@tbbgl.com.
