Dupré Logistics


5 Ways to Drive LTL Savings

Wednesday, April 09, 2014

The cost of LTL shipping can be extreme if you’re not taking advantage of strategies that enable you to capture savings while still providing top notch customer service.

If you’re the owner of a company in the field of retail merchandise, distribution or manufacturing, you need to ask yourself if you’re implementing the right ways to reduce LTL costs.

1. Do you know your supplier landscape?

You need to know much more than simply the mailing address of your suppliers if you want to reduce LTL shipping costs. It’s essential that you dig deeper into their operations, including an estimate of how regularly they make deliveries to your network of facilities and their capacity during these visits. It may be possible to increase your orders as a means of decreasing the frequency of LTL shipments. You can capture increased freight savings when you reduce the number of deliveries, while reducing the number of shipments that are hauled at non-standard rates.

2. Are you analyzing freight expenditures?

Most logistics solutions provide robust reporting features that enable you to analyze the cost of your LTL transportation efforts attributable to each member of your vendor network. Taking a closer look at these metrics gives you a more comprehensive understanding of the ways to reduce LTL costs. There are likely numerous opportunities where you might decrease your shipping expenses, such as those under your direct control for freight payment or those where you can convert payment terms.

3. Can you unite regional suppliers?

Often, you’ll find that you can purchase goods from suppliers that dominate certain regions. These resources are useful as a bargaining tool in negotiations, as well as a ready supply as a back-up plan. When you consolidate your regional vendors, you can decrease your transit distance and take advantage of the services of numerous LTL shippers. Ultimately, your shipping costs are reduced and you’ll see improvements in your actual time in transit. For the most part, you’ll find that regional carriers have a leg up on LTL national shippers that cannot promise reliable and quick service.

4. Do you hold vendors accountable?

Any initiatives you might implement as ways to reduce LTL costs will fail if your trusted vendors aren’t on board. They must appreciate the advantages and be monitored to ensure their carrier selections are in conformance with your plans. In addition, they should be penalized for violation of your policies, including instituting chargebacks when necessary. You might find it helpful to assign vendor compliance to a single point of contact to avoid giving your entire staff the headaches of enforcement.

5. Have you kept the lines of communication open with vendors?

Vendors can’t comply with your requests or policies if they’re not aware of them, so distribute a letter to all informing them of your goals and intents. Identify the point of contact within your organization if they have requests that fall outside your intended standard operations, and delineate the requirements they must adhere to in order to process them. In addition, remember that there are two sides to communication. Provide vendors with feedback on their performance as a way of encouraging positive behaviors.

Implement one or a few of these practices, and you’ll be reducing LTL costs while also providing the top notch services your customers expect.

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