LTL ROI PDQ via NMFC & FAK
How efficient are you at less-than-truckload (LTL) shipping? The solution to reducing freight costs and lag times could lie right at your own docks. Here are 10 tips to maximize your LTL efficiency:
1. Accurate information is key. When obtaining price quotes for upcoming shipments or bidding out future business, it is always important to know how much weight you will be shipping and the number of pallets your product will move on. Having this information will save you money and help you stay one step ahead of your competition.
2. Ship out of areas close to major metropolitan areas. Chicago, Los Angeles, and Philadelphia have a substantial concentration of LTL trucking firms and terminals. Generally, the farther you are from these areas, the more expensive your freight charges will be. The likelihood that your freight will be delayed also increases.
3. Use third parties (of course). If you ship out of multiple locations, third parties may save you time and money, especially if you move more than four pallets or LTL shipments weighing more than 5,000 pounds. Brokers use independent trucking companies throughout the country that often look for extra freight to fill out their trailers. These trailers are already heading to where the broker's customer is shipping, so they usually offer savings on this available space. The broker will then pass these savings on to the customer. Not only is it more cost effective, but transit time is usually faster because there is less handling.
4. Be flexible with time. This should be obvious, but the more time you can give a carrier to move your product, the more money you'll save.
5. Max out your pallets. If you can consolidate your product on fewer pallets without sacrificing its integrity, you can often save money when shipping through third parties.
6. Consolidate orders. If you know you will have multiple orders going to the same location, try shipping them at the same time. Brokers can pass savings on to their customers when they ship multiple orders to the same general location, even if you cannot put them on one bill of lading (BOL). Standard common carriers sometimes bill customers on each BOL even if the freight is destined for the same place.
7. Do not idly accept annual rate increases from common carriers. When rate increases are unavoidable, try to offset them by having your commodity reclassified to a lower National Motor Freight Classification (NMFC) class, freight-all-kinds (FAK). Get a 4Pl to manage the network!
8. Know the carriers and agents who are handling your shipments. Most LTL carriers do not service the entire country. They "service" those areas outside the range of their own equipment by securing agents based in those areas. Make sure you know these agents and they know you. If your less-than-truckload carrier uses multiple terminals, get the telephone numbers and names of those people who are accountable at each facility. Re-evaluate your dock procedures.
9. Get your freight ready prior to the driver's arrival and if possible, devote one or more dock doors to LTL pickups and deliveries. Coordinate a pickup system with your LTL provider to eliminate delays. LTL carriers assign multiple pickups to each driver and sometimes instruct drivers to leave after 15 to 20 minutes with or without your freight. By having an efficient loading system, both parties come out ahead.
10. Take the time to learn about the industry, and recognize trends. LTL shipments account for the majority of revenue generated by the transportation industry as a whole. Invest resources in making sure that your staff is knowledgeable about LTL practices and procedures. Also, stay abreast of mergers, acquisitions, and closings as these events can dramatically affect your service and pricing.
Communicate, collaborate, share, and be ready to take some risks as well...
1. Accurate information is key. When obtaining price quotes for upcoming shipments or bidding out future business, it is always important to know how much weight you will be shipping and the number of pallets your product will move on. Having this information will save you money and help you stay one step ahead of your competition.
2. Ship out of areas close to major metropolitan areas. Chicago, Los Angeles, and Philadelphia have a substantial concentration of LTL trucking firms and terminals. Generally, the farther you are from these areas, the more expensive your freight charges will be. The likelihood that your freight will be delayed also increases.
3. Use third parties (of course). If you ship out of multiple locations, third parties may save you time and money, especially if you move more than four pallets or LTL shipments weighing more than 5,000 pounds. Brokers use independent trucking companies throughout the country that often look for extra freight to fill out their trailers. These trailers are already heading to where the broker's customer is shipping, so they usually offer savings on this available space. The broker will then pass these savings on to the customer. Not only is it more cost effective, but transit time is usually faster because there is less handling.
4. Be flexible with time. This should be obvious, but the more time you can give a carrier to move your product, the more money you'll save.
5. Max out your pallets. If you can consolidate your product on fewer pallets without sacrificing its integrity, you can often save money when shipping through third parties.
6. Consolidate orders. If you know you will have multiple orders going to the same location, try shipping them at the same time. Brokers can pass savings on to their customers when they ship multiple orders to the same general location, even if you cannot put them on one bill of lading (BOL). Standard common carriers sometimes bill customers on each BOL even if the freight is destined for the same place.
7. Do not idly accept annual rate increases from common carriers. When rate increases are unavoidable, try to offset them by having your commodity reclassified to a lower National Motor Freight Classification (NMFC) class, freight-all-kinds (FAK). Get a 4Pl to manage the network!
8. Know the carriers and agents who are handling your shipments. Most LTL carriers do not service the entire country. They "service" those areas outside the range of their own equipment by securing agents based in those areas. Make sure you know these agents and they know you. If your less-than-truckload carrier uses multiple terminals, get the telephone numbers and names of those people who are accountable at each facility. Re-evaluate your dock procedures.
9. Get your freight ready prior to the driver's arrival and if possible, devote one or more dock doors to LTL pickups and deliveries. Coordinate a pickup system with your LTL provider to eliminate delays. LTL carriers assign multiple pickups to each driver and sometimes instruct drivers to leave after 15 to 20 minutes with or without your freight. By having an efficient loading system, both parties come out ahead.
10. Take the time to learn about the industry, and recognize trends. LTL shipments account for the majority of revenue generated by the transportation industry as a whole. Invest resources in making sure that your staff is knowledgeable about LTL practices and procedures. Also, stay abreast of mergers, acquisitions, and closings as these events can dramatically affect your service and pricing.
Communicate, collaborate, share, and be ready to take some risks as well...
posted by Michael J. Stolarczyk at 22:48
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