One of the biggest components of importance for shippers is “Trucking Freight Cost". Big companies employ entire logistics departments to find the most cost-effective route and method to move their cargo. Some large shippers use their own trucks; some use freight brokers; and some allow their customer to arrange for the transportation. Smaller shippers rely more upon freight brokers to move their cargo. It is in the consumer’s best interest to do his or her homework on various companies’ trucking freight rates. It is wise to consider the idea of hiring a consultant to advise the consumer on trucking freight rates. This is because there are so many details that can affect trucking freight rates. Here are some of the tips for freight negotiation.
How often does your company ship product? If you require the carrier to show up to your dock daily the cost will be different then if your requirements call for once a week pick-up. How much tonnage do you ship per destination will directly affect the cost of freight. Provide the carrier annual numbers as well as averages per week. The best way to obtain these numbers is to take the prior year's shipping numbers and add or subject business (according to gains and losses).
FREIGHT RATES OF CURRENT CARRIER
What you are paying your current carrier? Often times when it comes to negotiating freight contracts, it is a carrier who has reached out to the shipper seeking business. When the shipper provides copies of their current carrier's invoices, it is incentive for the new carrier to provide a deeper discount in order to land the business.
How quickly do you pay your bills? Simply telling a carrier how quickly you pay is not sufficient for good negotiating tactics. The best option is to show proof of payment. Do not show just one payment, but rather at least six months' worth of invoices and payments.
What is your shipping schedule? What day/days of the week do you primarily ship on? Are you flexible on the time of day you ship? That may be a key negotiating tactic. If you can adapt to the carrier's schedule it gives you room to negotiate a lower shipping cost.
Where do you ship? If you are moving your product across town, it will be less expensive than shipping across country. Across country will be less expensive than internationally. If you ship to multiple locations then you will need to decide if you want to set up a single zone rate or a multi zone rate. A single zone rate is practical if you ship to the same destination all the time. This rate is also practical if you ship primarily close to your home location. A multi zone rate is more practical if you ship throughout the country on a regular basis.
The bottom line is that trucking freight rates are determined by everything from beginning to end of the shipment. However, tracking and implementing fair trucking freight rates can also be a humungous undertaking that will ultimately drive up trucking freight rates if the consumer and the carrier are not careful with the trucking freight rates games out there. The global economy relies on the trucking industry and, therefore, the trucking freight rates of those involved.