Freight Shipping Blog

Between fuel prices and an uncertain market environment, companies who do not make concessions to their clients on shipping costs will lose market share to their competitors who have a more attractive landed cost of goods sold. To improve market share you have to rely on more than just your carrier’s good will to ensure you are getting the best pricing. 

Carriers are more concerned with increasing their profits than they are about making concessions, even if they can obtain higher volume accounts. Shipping rates are rising, and to cut costs you have to find a solution that will bring negotiating leverage to the table and help you benchmark your current costs so that future savings can be measured accurately.

Many companies who have been successful at keeping shipping costs low and improving their market position have outsourced their freight procurement requirements to Transportation Spend Management (TSM) consulting companies who control millions of dollars in freight spend. This can have a huge impact on shipping and freight charges, and will enable you to focus on other important business processes and priorities. 

Why Should You Outsource to a TSM company?

• TSM companies can help to lower shipping rates, achieve greater concessions, and gain better services overall
• TSM Companies can increase your shipping departments productivity through the implementation of technology tools not currently available
• You gain the ability to analyze cost of inventory, freight costs, and improve your Cost of Goods Sold
• Outsourcing can help you retain existing customers and increase sales and improve business processes at a faster rate.

As a line item expense freight and logistics cost should be managed as efficiently as your top line item expenses. Unfortunately for most companies these costs are not managed professionally and purchase decisions are often made on a relationship basis with little regard to cost and service. The positive effects of partnering with a TSM company can be compounding and result in major business transformations. 

There is a key that fits into the proverbial lock of cutting costs and improving customer retention in the supply chain world and it starts by knowing where to collaborate and with whom.  

DSi’s proprietary Transportation Spend Management programs can provide data on industry specific benchmark costs so you can evaluate how you compare to your competitors. A DSi freight management program typically saves 20% or more using name brand carriers who can meet or exceed your service requirements. 

Contact us today to learn more about our ”Guaranteed Freight Cost Savings” programs. If we don’t meet or exceed our savings projections to you, we write you a check for the difference. 

Simply defined an LTL Broker is a non asset based (does not own or operate tractors & trailers) service company who has pricing agreements directly with LTL carriers and offers LTL pick up and delivery services through these carriers at a mark up. They bill you directly and then settle with the LTL carriers.

Using LTL Brokers as an alternative to dealing directly with an LTL carrier can in some cases provide the best LTL rates. That's what everyone wants...the world's best freight quote on every shipment, right? I am amazed at how much time and effort some small to medium sized companies spend daily in making several phone calls or accessing several web sites where they can shop their shipments for the cheapest possible discount freight quote du jour.

Far too many of these daily shoppers end up sub optimizing the competitiveness of the LTL quote they end up selecting. They are told or otherwise assume that the LTL Broker can offer a better freight price because they can use their collective volume of business to negotiate deeper pricing with the LTL carriers. This is true for the Mom & Pop shippers out there. Unfortunately a surprising number of those companies who spend hours browsing or calling for today's best discount freight quote greatly underestimate the power of their own collective volume of business when competently and professionally represented directly to the LTL carrier group.

A professionally negotiated "Core Carrier" LTL program tailored to client specific business rules and service requirements can generally deliver more competitive pricing than most LTL Brokers can offer to companies who ship as little as $30,000 to $50,000 a year or more in LTL shipments. A Core Carrier program reduces the number of LTL carriers, and properly utilizes and leverages all available inbound, outbound and third party LTL volumes. When these programs are backed up by the discipline of Route Guide implementation, Non Compliance reporting, and freight bill audit and payment services the payback is impressive. The payback can easily be measured by more competitive pricing and freeing up and redeploying  staff time spend burning up the net or dialing for dollars.

While LTL Brokers may have blanket pricing from the LTL carriers, that blanket pricing in combination with a mark up often is not your best discount freight option. The LTL carriers won't always give blanket pricing and when and if they do they are smart enough not to allow resellers to erode their client base by giving them deeply discounted pricing.

If you are dialing for dollars everyday you might want to consider contacting a transportation spend management firm who can design, deliver and implement a managed Core Carrier LTL program for you and support you in managing that program. Even after paying the management firm's fee, the savings in your LTL costs alone could be as much as 20% to 30% or more.