9 Ways to Reduce the Cost of Your Freight Forwarder

Transportation cost takes a considerable part in the overall cost of a business that has large quantities of inventory. It is the basic principle to find out the profit of the company after deducting all related expenses from total revenue.

So, transportation cost is an important determinant to figure out the overall profitability of your business. The transportation cost varies according to the types and numbers of the freight, cargo and shipment. There are some other factors also involved.

If you run a Melbourne-based business that needs continuous freight forwarding, then there is no reason to think that the cost is fixed and you can not reduce it. There are plenty of ways to reduce the value of your freight forwarder.

In this blog post, you will get some ideas about these ways.

1. Rethinking your current way of transportation

This is the first step in the overall cost reduction process. You need to evaluate your current mode of transportation, then reconsider it.

You can compare it with all the alternative options available. The distance and the product you will transport will be significant while determining it. However, changes in global shipping such as soaring demands increase the pricing of overall shipping and transportation.

Sea freight is comparatively cheaper than air freight for international shipping. On the other hand, the suitable option for local freight would be by rail or road.

So please do your research thoroughly before you finally decide on reconsidering it. Pick the best option for your business.

2. Choosing to offer night pick-ups

This is yet another way of reducing the cost of your freight forwarder. It means to pick up the loads into a backhaul in the evening hours. To be precise, the time of picking the loads is when others have already closed their docks.

These hours are between 6 p.m. and 12 a.m. By doing so, you not only reduce the freight cost but also you get to strengthen your existing relationship with the carrier.

This particular practice of including evening backhauls can reduce the shipping rates by almost 15%-20% from the standard rates.

3. Trying to know the shipping carrier better to build a long term relationship

This is a prevalent yet effective practice. Invest some time to know your shipping carrier well. By doing so, you can get the best deal from your shipping carrier.

Try to stay in touch with your shipping carrier constantly. Stick to getting their services for a long time. Try to remind them how long you have been a loyal customer to them, and you are willing to continue it that way.

When the shipping carrier realises that they have a steady business relationship with you, and they would like to continue it in the coming year, they will provide an exclusive offer to you.

So try to avoid switching the carriers for your business now and then. Instead, stick with one and build a strategic and long-term relationship.

4. Trying to ship on the off-peak days of the week

Doing any activity during the off-peak days costs less. So, shipping your products a bit earlier or later during the off-peak time of the week can save you a significant amount of money from the budget.

Friday is an off-peak day for shipping road freight. Choosing such days can make a huge difference in reducing freight forwarding expenses.

Mondays can be picked as well; there will be less rush, and it will reduce the cost.

If you run a non-consumer products business, then choosing to ship products on off-peak days can be suitable for you.

5. Choosing to ship more products all at once

Choosing to ship the products in bulk will cost less than sending a small number of products with multiple consignments. With the bulk shipping process, containers are being used more efficiently, which would also take less time to process for the carriers.

So, encourage the customers to go for a large order. Educate them on how it would lessen the overall cost in the long run. Show them with numbers how shipping eight pallets will be cheaper than sending two pallets every three days.

To encourage bulk orders, you can arrange for incentives. It will be beneficial for both of you and the customer.

6. By picking multiple ways of transportation

Going for multiple modes of transportation can also reduce the cost. After doing thorough research, when you blend air, road and ocean transportation, you can expect to reduce the overall cost and time.

Get an idea about the distance and hire transport and logistics companies in Melbourne that will be cost-effective and suitable for it. Do the math accordingly. For instance, when you see air shipping is too expensive, and ocean shipping will take a long time, then you can add transporting the product by road as well.

7. Becoming more mindful about the additional charges

Even if you are unaware of this, the carriers may sometimes provide some other services. For those additional services, they may charge additional fees.

Don’t be surprised when you see the final amount of the invoice is way above your initial cost estimation. So, to avoid such surprises, talk with the carriers before and find out what additional charges you can expect.

You reduce the cost by avoiding unnecessary services for your products. If you find it a bit difficult to understand all the services, learning some shipping jargon will help you.

8. Avoid marking all of the shipments as “Urgent”

It depends on the type of product you are going to transport. So, having proper research is extremely important to choose the best shipping option available for a particular product.

For example, if there is an option of flexibility and your shipment is not urgent, you can choose the long route. It will be more cost-effective for you.

So stay up to date with all the new ideas, current trends, changing shipping costs and shipping times so that you can get the most out of it for reducing the cost.

9. Knowing the tariffs well

While shipping the goods internationally, there is no way of avoiding the tariffs. So it is imperative to gather all tariff-related information to save costs later.

There are multiple facts that you must consider. For instance, to discourage products from sweatshops, non-tariff trade barriers may exist. Getting rid of such barriers can be very costly and time-consuming.

Moreover, you can always consult logistics companies in Melbourne for better ideas.

Wrapping up

Just doing a bit of research and following some cautionary steps, you can minimise the cost of your freight forwarder. The tips mentioned above can come in handy on many occasions. Yet, most of the shippers avoid these and often pay more than they should.

So if you find any way of reducing the cost of your freight forwarder, it would be wise not to delay. Instead, utilise these ways properly to increase the profitability of your business in the long run.