LTL Transportation - TenderTool Freight Sourcing
Less-than-truckload freight is for many companies a tricky and challenging part of transportation. Therefore, shipping LTL requires special attention and often, a different approach than full truckload freight.
For companies shipping smaller goods or items that won’t fill an entire truck, less-than-truckload freight is everyday's business. Normally, LTL loads are semi-trailers with an average between 100 pounds / 45 kg (the limit for many parcel freight carriers) and the 10,000 lbs / 4545 KG per load. Shipments that exceed the 10,000 lbs are normally full truckload shipments.
Both inbound and outbound requires a lot of attention, and without the right technology and knowledge, shipping LTL freight can easily become an expensive practice. therefore, 7 useful tips to reduce LTL costs.
7 tips to reduce LTL Transportation costs
1. Make LTL transportation costs visible. In the current logistics landscape, there are many companies that do no have an overview of LTL cost components and how much they are spending on LTL. This is crucial to identify areas for improvement. Moreover, without it, it is hard to implement changes, measure progress and identify new opportunities for improvement. Working together with a freight audit provider is a very robust way of getting this insight. Most providers are equipped with BI (business intelligence) solutions, providing customized performance reporting for LTL visibility.
2. Diversify your carriers. One of the first steps to reduce LTL Transportation costs is looking at your current carrier portfolio. Carrier freight rates will vary depending on the lanes and commodities you’re shipping because carriers specialize in different areas ( geographical, transportation etc.) TenderTool Tip: Don't be afraid to stir things up and change your current set. Try different scenario's and multiple carrier (backup) strategies. Using an affordable freight tender software is the ideal partner. Keep in mind: the number of carriers is not the key, but scrutinize the best fit meeting your company’s needs. Without a doubt, you will get better freight rates when working with a carrier that can move your freight comfortably within their network. After all, it is all about collaboration nowadays.
Part II - Reduce LTL Transportation costs
3. Erase unnecessary accessorials costs. Another major in the list. Accessorial costs in shipping are a key negotiation term that should be well-addressed, no matter what carrier you're dealing with. Remember, that there are accessorial charges, such as lift gate services or remote access locations, that are mandatory. However, there are many accessorial shipping costs that you can avoid! For example:
- Limited access fees: Driver will enter a building to find the consignee
- Fuel surcharge - Often not negotiated.
Any accessorial charge can be negotiated to an agreed upon low flat rate, or even be wiped off the table. TenderTool Tip: Make sure you fill in the bill of lading correctly and as detailed as possible. If you have things organized on your end, the carrier is willing to work with you!
Part III - Reduce LTL Transportation costs
4. Bypass spot quote shipments. If there is no contract in place with a carrier, you will typically pay more. Bottom line, it pays to commit to a carrier. As the market tightens and prices increase, shippers should avoid transactional habit and look for structured solutions.
5. Consolidate your shipments. Consolidating multiple LTL shipments into full truckload shipments is another effective tactic to reduce logistics costs. This tactic is especially effective for long distance transportation.
Extra tip: Financial consolidation of shipments.
6. Revise your current packaging. Shippers can often lower their freight class and reduce logistics costs by checking their current packaging. Companies with a high LTL shipping portfolio could for example consult a packaging specialist to redesign packaging.
7. Work with a 3PL. All items in the list above will surely improve your bottom line and reduce LTL Transportation costs. Nevertheless, implementing them will require resources and time. If your organization requires cutting costs on a short-term, the best options are: hiring a third-party logistics (3PL) company and enhance the current freight tender capabilities for your company. 3PLs have internal expertise and can find hidden cost savings opportunities. Next to that, many 3PL's have their own prequalified LTL carrier network.
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About TenderTool - Freight E-sourcing
TenderTool is the fastest growing freight tender platform in the industry. With cutting edge technology, we enhance the logistics tender experience for both parties involved. Our tool includes automated rate card creation, efficient communication flows and a carrier-friendly interface. As a result of our intuitive setup, both the shipper and carrier reduce time spend on freight tenders, and moreover, reduce logistics costs in the in overall freight procurement flow.
Pieter Kinds (41) is CEO of TenderTool, a cloud-based logistics sourcing platform.