Getting low transportation rates is challenging. The problem is that most people don’t have time to learn the complexities of the transportation industry. And, most people don’t understand the pricing leverage they already have.
For shippers of any size, there are three easy ways to get the lowest contract transportation rates.
Get to it. Right Now! You’re Almost Too Late!
You need to start looking for a transportation partner right away. Freight rates are primed to surge in the near future, and you’ll want to lock in low contract rates now. Low truck capacity, a shortage of drivers, rising oil prices, aging equipment, rising complexity, and government regulations are some of the factors that will make carriers more willing to negotiate with you now.
Learn to Negotiate Transportation Rates Like a Pro
You have to know what all carriers want: high volumes of freight that are easy and cheap to carry. It’s simple. Highlight anything in your distribution network that aligns with those two goals.
On a more practical note, here are some of the best negotiation tips you’ll find for transportation:
- When negotiating, make sure you’re using all your freight spend for leverage.
- Make sure your data is accurate and up to date, and have it with you during negotiations so the carrier can picture exactly how they would carry this freight.
- Highlight good freight qualities: easy loading/unloading, fits on pallets, regular size and weight, warehouse/DC productivity (low dwell times), historically consistent on-time payments, and effective product packaging.
- Don’t try to hide bad freight qualities – it won’t work in your favor in the end.
- If you know which accessorials you will be charged for, negotiate a rate ahead of time instead of just waiting to be hit by them.
- Negotiate with a few carriers, tempting them with all your freight spend, and make sure they know who else is bidding on your freight.
Use Free Transportation Management System
You can score the major benefits of a TMS by working with a third-party logistics company (3PL). Typically, shippers save an immediate 10% on transportation management when they implement a TMS. A TMS has thousands of carriers in its network, all of whom bid on your freight when you post a load. All you have to do is choose the best one.