From the perspective of many businesses, shipping is shipping. When they need something sent out, they search for the cheapest option, contact the carrier, pay a fee and move on. There is, however, much more to the process. At least, there should be, if companies are looking to find the best rates, highest savings ratio, or the overall best service available.
When planning a shipment, the first thing to consider is the size or density of freight shipped. Common freight types include parcel, less than truckload (LTL) and full truckload (FTL).
- Parcel – parcels are often delivered collectively, but each unit must weigh less than 150 pounds.
- LTL – shipments must typically weigh under 20, 000 pounds. Spatially, they usually take up no more than 10 linear feet.
- FTL – shipments greater than 20, 000 pounds or 10 linear feet.
For parcel delivery, there are a couple of major players in the market, namely UPS and FedEx, and a number of smaller regional companies as well. The lack of competition contributes to getting a desirable contract difficult. It often depends on a deep understanding of the impact of freight characteristics on rate, advanced negotiating tactics, and the patience to lower costs.
For larger freight types, there are more options available. There is no dominant LTL or FTL carrier, which means various delivery companies offer competitive pricing in order to win contracts. This makes larger shipping orders less expensive relative to what’s being moved, but the magnitude of the freight makes the actual expense greater than that associated with parcel delivery.
In either case there are certain steps that can be taken to reduce cost. These include:
- Negotiation – have an experienced shipping logistics solutions provider to get the best contract available. They will be familiar with what can be successfully negotiated.
- Packaging solutions – proper packaging can reduce freight damage. It can also reduce your effective billable freight weights (dimensional weight).
- Optimizing – finding the best mode, route and carrier sounds easy, but a transportation system considers thousands of iterations at once, whereas the human brain can typically only handle seven at a time.
- Execution – put in a strong tendering and tracking solution to leverage the competition that exists in the marketplace.
Generally selecting a shipper is based on which mode will be the most cost-effective. When sending freight using parcel service is not an option, it usually pays to go with LTL if less than a full truck is required. Alternatively, less common modes such as partial truckload (PTL) or multi-weight is also available; however, it is only offered through a handful of shipping logistics companies. Partial truck load is reserved for shipments similar in size and weight to large LTL shipments or large multi weight (hundred weight) parcel shipments, but both are associated with a number of desirable benefits that are definitely worth considering.