Is the price right?

Have you ever wondered whether the freight rates you’re paying for truck transportation are optimal? Or even fair?

Here is what you need to do to be a better purchaser of freight services.

You need complete information to obtain the best pricing. This means keeping track of all sorts of data, related to not only your internal operations, but to those of your service providers as well. Most carriers are more open to sharing information with you than you might think.

Go online. Comparison websites (like www.truckloadrate.com, for example) should be the first line of defence for curious shippers, as they present essential information to use as a baseline. You can find out current information on the average market rates for given lanes, as well as statistics on fuel surcharges. This information will help you determine if your spend is in line with market indicators. While it’s possible that your estimates are accurate, most likely they are not. If there are variances between what you are spending and what market indicators reveal, then there should be room for negotiation.

From time to time, someone will call with a great rate; occasionally these rates are worth taking advantage of. But when you do, always confirm that the level of service won’t be compromised by a lower cost.

Once you’ve started to pay more attention to market indicators, it’s time to act strategically. Using multiple carriers for different lanes is generally a smart way to get more competitive rates. If you have a transportation management system (TMS) it streamlines the process.

It’s also time to understand your carrier’s business. Make sure you know about the application of rates, such as cube rates vs the linear foot rule and cost-per-pallet pricing.

You should also be considerate of demurrage, which is a significant cost for carriers. To avoid charges, you should have your shipments ready to pick up at the agreed-on time and arrange for timely receiving.

Shippers requiring late pick-ups need to understand carriers’ linehaul cut-off times. These can produce transit delays, which can translate into customer non-compliance charges for missed appointments.

Crucially, to receive the best prices, shippers should be transparent. You must provide complete information in order to establish a level of trust. Through this process, you can uncover new opportunities for savings. For example, you may be floor-loading stackable pallets, but your carrier is charging by linear foot based on the single stack. Ensuring the bill of lading indicates the shipment’s true cube helps billers accurately capture information.