Shipping products by freight is similar to sending parcels by mail; the shipping industry, like the mail industry, is so necessary and so ubiquitous that we often tend to think that its pricing system is only fair. Yet, as with all companies in the service industry, shipping companies are in the business of making money. Finding the best freight fees typically involves logistics, and if you’re managing your company’s logistics independently, there’s a good chance that you’re overpaying for freight fees. Without investing substantial time, it’s nearly impossible to do an analysis of all freight fees and then analyze the best options for your company. That’s why more and more manufacturing companies are hiring a third party logistics expert to determine the best instant freight quotes for their shipping needs.
A logistics expert analyzes shipping companies using a broad range of criteria, including freight fees, customer satisfaction, on-time percentages and ease of doing business, and then analyzes how your shipping needs can be improved by the top shipping companies. To arrive at the best logistical solution, logistics experts use logistics software, often called freight transportation software in the shipping industry.
In addition to the cost savings that result from logistics solutions, another important benefit of using third party logistics experts is their skill in negotiating shipping contracts, such as for in-bound, out-bound and less than truckload shipping. However, companies who don’t have the budget to let a logistics expert oversee their shipping process can still purchase freight transportation soft ware and perform their own logistics monitoring.
The most immediate benefit of employing logistics software is that takes the time, guesswork and possibility of human error out of arriving at the best shipping solutions. To this end, most logistics software offers carrier rating information, shipping routes and maps, internal and external shipping compliance guidelines and various instructional sections. But once you dig into the solutions, you’ll find that some solutions that initially seem to make no sense are the best solutions of all. For example, some companies realize that shipping by air is less expensive than ground shipping when the price of warehouse fees is factored in. Similarly, some companies discover that a longer ground shipping route is actually more expedient than a shorter route due to the shorter route’s heavier traffic.
Another great discovery, particularly for small companies, is the benefit of less than load shipping (LTL). In LTL, shipping companies combine numerous small loads into a full load and split the freight fees between the manufacturers.
The goal of logistics is to reduce the cost of shipping while simplifying the shipping process, and research shows that companies who implement logistics software realize at least a 10 percent reduction in shipping costs at the end of one year, with the percentage increasing thereafter. Freight transportation software integrates complicated shipping needs into one, easy to manage solution and further streamlines simple shipping processes. In either case, implementing the software is the best way to ensure that you never overpay for freight fees again.