FTL shipping, in general, presents a better value on its shipping rates than LTL, but is still more expensive overall. Fortunately, you still have a few options to lower your FTL rates and save a little extra money, especially if working the “spot” market.These 4 methods can help you bring FTL shipping expenses down. Click To Tweet
Lower Your Shipping Costs
Freight shipping costs generally don’t vary based on what exactly you’re transporting. Rather, FTL rates depend on a few other factors that, when taken advantage of, can help you pay a little less. Here’s how you can lower your FTL rates:
- Limit delay times
- Pay within carrier terms
- Lead time from tender to loading time
- Try using an app
1) Limit Delay Times (Detention)
One common factor in increased costs is repeated delays at both shippers and consignees. Carriers are making money when the wheels on the truck are moving fully loaded with freight. As well, almost all carriers charge some form of detention which will add additional charges to your invoice. The carrier may have their next pick-up already scheduled (after your pick-up and delivery) and any delays put them in jeopardy of being late for their next load, which could cost them a customer. As an example, we have seen some shippers require a pickup appointment to be scheduled and then don’t load the truck that arrived on time for many hours. Be a shipper that carriers want to pick-up from, it will dramatically reduce your rates over the long-term.
2) Pay Within Carrier Terms
Another reason you might accrue higher transportation rates is the terms you pay in. Carriers run on very tight budgets and expect timely payment (typically 30 days), if your terms are longer, this is affecting your rates negatively. Inversely, we see many smaller FTL firms that factor their invoices for a % of the load (invoice). Inquire with your carrier to see if they offer a “quick pay” rate reduction. In many cases this is an easy way to reduce your transportation invoice by 3-4%, which can add up quickly on the FTL side of transportation, due to the high overall cost of the shipment. Pay on time or early and in full to ensure you are getting the best possible rate.
3) Lead Time (At Least 24 Hours)
A major factor in transportation cost when working in the spot market for FTL, is the amount of lead time the carrier has to make the pick-up. Understanding that many FTL shipments can happen the same day due to customer constraints, the more lead time you have the more competitive rate you will be able to negotiate. If able to give carriers at least 24 hours notice on FTL’s, you will see reductions in your rates.
4) Try Using an App
A specialized app can help you drive down cost as well. The “right” app will create a competitive market for carriers to bid on your freight which will drive your cost down. Be sure to choose an app that also has the following capabilities: vetting of carriers that meet minimum safety requirements, able to award, tender and track shipments, GPS tracking, and the management of invoicing & payments. Any app should also give you accessibility to a much larger carrier pool of qualified transportation providers. With all this information at your fingertips, you can quickly find and resolve any issues that may arise. More importantly, however, this will help ensure you are receiving the most competitive rates in the market and still allow you to have a direct relationship with the carrier.
Pro Tip: Freight Cowboy is launching an app for FTL in late 2019! Stay tuned for developments on progress and how this new app can help you with shipping management.
Save on FTL Freight Rates
Shipping costs add up quickly, and most businesses want to keep their expenses as low as possible. Fortunately, with a little strategic planning around full truckloads, it’s more than possible to lower your FTL rates by a significant enough margin that it will make a difference in your business’s overall budget.
Connect with us to learn more about our upcoming app and how you can save more on your shipping expenses!