Freight Shipping Blog

Expedited Freight Shipping - A Budget Buster

Posted by Rob Snowdale on Wed, Jun 03, 2009 @ 05:23 PM

How many times have you ordered something really cool on line and just before checking out you check out the shipping options? "Hmmm..., I can get it in 3 to 5 days for $15.00, but I can have it tomorrow for $26.25, oh what the h..., I'm springing for the premium freight charge!" In my younger years my Mother always accused me of needing "instant gratification". Maybe that's just part of the psyche of the boomer generation, but we see more and more expedited freight requirements coming through our system daily. I suspect it has less to do with 'really cool' stuff and more to do with less than optimum inventory and manufacturing  planning. As a nation we want things to move quickly and we want what we want sooner rather than latter. We want it fast, and this includes fast freight! "I don't care what it costs, its got to be there Friday morning"; that's music to a lot of carrier's ears in the air freight forwarding, or ground expedite business.

So what really is the cost of all this expediting? Is there a typical markup as a percentage from 'standard service' to 'premium service'? Is everybody in customer service or shipping authorized to select expedited shipping options? How do we manage expedited shipping services to make sure we're not paying more than we should be?

The right answers to these questions for most small to medium sized companies could significantly impact the monthly P&L statements. The fact is for many companies premium or expedited freight shipping is a wild card. They might rely on one or two spot market expediters, and the more they lean on the panic button the more their costs escalate.

We generally define domestic expedited freight as any shipment that requires delivery earlier than standard service. Standard service of course would be normal surface LTL published transit time, which is specific to the LTL carrier you use. Most of the LTL carriers have service upgrades that are available at roughly a 20% to 30% uplift from their standard service. In some cases where the service requirement is upgraded after the shipment leaves the dock, these "in-system" upgrades may be your best option, but not always. There are times when the in-system options cannot achieve your required delivery date and time. In those situations the shipment has to be "rescued" and recovered by another expediter from the LTL trucking carrier's system.

So what are your options to manage your expedited freight requirements in the most cost effective manner that protects your due dates and times? Domestic expedited shipping service options usually include:

  • Surface expedite-team drivers or exclusive use trips
  • Surface LTL shipments ran as Truckload
  • Air Freight Forwarders (non asset based brokers/forwarders)
  • Air Freight Lines (asset based operators- UPS/Fedx etc)
  • Air Charter Brokers (non asset based dedicated flight brokers)
  • Air Charter Lines (asset based dedicated flight operators)

Determining which of these options is best suited and best priced for your expedited shipping requirements can be a complex decision process. That process involves factors such as: weight, dimensions, ship date and time, protect delivery date and time and the mileage of the trip.

The bad news in all of this is that unless you expedite regularly and have established rates it can take a lot of time and telephone calls to find the best cost and service option to meet the need. So much time that many companies often throw up their hands and say, "just find me someone who can get it there on time. It's got to be there, I don't care what it costs".

The good news in all of this is that there are a number of excellant on- line decision support systems that can successfully leverage and manage your expedited freight for optimum cost and service in a real time environment.

Some companies have regular and consistent expedited requirements for which a negotiated solution is in place. If your company is not in that category on-line help is probably the best bet to successfully manage your expedited shipping.

Topics: expedited freight, air freight forwarding, expedited freight shipping, expedited ltl

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