7 Strategies to Reduce Shipping Costs
1. Analyze your operations
Look at your business operations holistically and with a fresh eye. Question all your assumptions about how you do things from manufacturing all the way through delivery. Pretend you are brand-new to your company—ask the kinds of questions someone with no prior knowledge of your business or operations might ask. Analyzing your business from the ground up can help you catch inefficiencies and streamline your operations.
2. Work with an experienced logistics company
Shipping is complicated. Tariffs, taxes, fees, and requirements are many-layered and always changing. Rates change around holidays, weather, and peak seasons. Logistics is the process of analyzing goods to determine the most efficient route and mode of transport.
Working with an experienced and full-service logistics company, one that handles both freight forwarding and customs brokerage, can save you time and money. Consult with your logistics provider about ways to control costs, maximize efficiency, and leverage discounts and rebates.
3. Manage risk and errors
Managing risk and minimizing damage and errors is a great way to reduce shipping costs. Protect your shipment from damage or theft by making sure you’ve got comprehensive insurance. Keep all your items together on the shipment if possible, and ensure they are well cushioned and tightly wrapped.
Ensure you've got clear, accurate labelling and markings, and make sure label adhesives can withstand temperature changes. Photograph your shipment if possible. Ensure that your team members and vendors fill paperwork out honestly and correctly to reduce mistakes and costly fees.
4. Optimize packaging
Freight charges are based on the weight and volume of goods. Optimize your packaging to reduce any extra or unused space, which can also help by reducing cargo space. Finding the sweet spot between the minimum thickness and size of your packaging and wrapping that protects your inventory is the goal: reduce damage and loss, but maximize how much you can fit in your shipment. By optimizing packaging, you can save on packing and raw materials, warehousing, and possibly even more shipping costs.
5. Consolidate goods
Combine smaller or multiple orders to create more volume in your shipment and take advantage of large volume pricing.
6. Optimize mode of transport and route planning
Weigh the costs and benefits of air, ground, and sea freight. Air transport can be fast, but expensive. Land and sea transport can save money, if you build in enough lead time to meet your deadlines. Consider if your order might be split between airfreight and sea freight; perhaps a minimum stock can be sent by air and the rest by ocean to manage the joint priorities of timelines and expenses.
Talk through the route your goods will take and weigh the impact of more direct routes on your costs and timing. The goal of route planning and optimization is to reduce delivery time and shipping costs.
7. Increase lead time
Rush shipping will always be more expensive, so building adequate lead time into your process can save you money. It can also allow you a buffer to absorb any border or weather delays.
With over half a century of experience in providing shipping and freight solutions, we can help.
Information provided by: Freight Dept. - Cole International