14 Jul Reducing Freight Forwarding Expenses Tips
Shipping cargo from place to another is a process that involves a lot of procedures from custom packaging to customs clearance freight shipping, including supply chain management, shipment tracking and other services. However, adding to them the services of freight forwarders to handle your business the price of shipping will increase. Luckily for you, there are a few ways to reduce freight forwarding and related expenses and the following are 8 tips on how to reduce freight forwarding expenses and these are:
Evaluate your Method of Transportation
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. However, the first way to reduce freight forwarding expenses is to evaluate and reconsider your mode of transportation likewise:
If you are shipping a lot of cargo internationally, sea freight is typically a cheaper option than air freight
If you are shipping freight locally, rail freight or road freight may be a better option based on the products you are shipping and their travel distance.
You may consider alternate ways of shipping or even a hybrid of multiple modes, if necessary.
A combination of air, sea and ground transportation could help you cut costs.
These days you can get cost estimates along with information about best transportation mode likewise:
You can take your time to do solid research on the advantages and disadvantages of each shipping mode and make your decision.
You can secure cost estimates from several different companies and make a comparison.
This comparison is easy online.
It is imperative that you also evaluate your mode of transportation based on CO2 emissions.
Typically, sea freight has lesser emissions than other modes of freight transportation.
In 2021 Greenhouse Gas Emissions by mode of transport in grams per person/ton kilometer are likewise:
Passenger Car: 142
Bus (Public Transport): 76
Train (Public Transport): 67
Train (Long Distance): 41
Bus (Long Distance): 32
Freight Train: 24
Ship during Off-Peak Periods
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, shipping a day later or earlier depending also on your type of cargo can make a difference and reduce freight forwarding expenses likewise:
Fridays, for example, are typically off-peak days for shipping road freights and this is because most customers are trying to get their products delivered by Thursdays, so they can be on shelves Fridays and ready for sale during the weekend.
Mondays, interestingly, can also be slow days, resulting in carriers looking for road freight.
Shipping could be a great option on Mondays of course depending on the type of your cargo, for canned goods for example have more flexibility than fresh goods.
Keep in mind that shipping on off-peak days, where possible, could be an ideal option for the shippers of non-consumer type products and cargo that is not time-sensitive.
Become a Regular and Enjoy the Benefits
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, remind your carrier(s) how long you have been using their services and that you are a loyal customer in order for them to reduce freight forwarding costs for you likewise:
This may be a good way of getting the best price for services in general, in any industry, really.
So, take some time to get to know your shipping carrier(s) and work on building a relationship with them.
Hence, rather than switching to a new carrier, develop a good relationship with your current one.
Once your carrier is reminded of your support and that they have and will continue to have steady business from you, they are likely to offer better conditions.
You will be surprised how much you can save through a strategic, long-term relationship.
Every reliable company will do their best to keep regular customers.
Also, consider getting a longer-term contract as a way to lock in a better rate.
This is a much better option than adjusting each year to the rising prices.
A good relationship and communication with your shipping company can improve the efficiency of your operations and reduce freight forwarding expenses.
Being a loyal customer with a steady single lane, you can save up to 12% compared to standard pricing. Not bad, right?
Do Research and Follow Up to Secure Benefits
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, do research on prices, options and combinations of freight shipping that could suit your needs for:
The above may have been workable in 2019.
However, 2021 is an entirely different ball game and it seems that it makes no difference to shipping lines whether customers have been loyal or not.
There have been a range of complaints and accusations against carriers ignoring long term contracts and forcing customers to go the spot market route.
At the current moment because of the prevailing market conditions, there is nothing much a freight forwarder can do to alleviate the sea freight rate issues for their clients.
Freight forwarding expenses, for a BCO, should not increase or decrease based on the freight rates as the freight forwarder still provides them the same set of services whichever direction the freight rate is heading.
In most cases, the freight forwarders would be charging their customers a service charge per container irrespective of the freight rates that are prevalent.
Of course, there are many different agreements and arrangements freight forwarders may have with their customers, but the majority work on the above basis.
Since in most cases, freight rates have become non-negotiable, all that the BCOs or freight forwarders can do is to at least ensure that they have space guarantees and confirmations based on their long relationships with the various lines.
Book your cargo way in advance and ensure that those bookings stay on the carrier’s list and are not knocked off, for follow up is crucial here.
Getting their products in the market is more important than the cost they are paying for it, for many customers right now.
Of course, there are also many customers who will not be able to sustain the high freight rates, but unfortunately, such is the nature of the business.
Ship More Products, Less Often
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, try shipping more products, less often for:
If you can manage to do so, it is a lot cheaper to ship ten pallets at once than to send two pallets every two days.
Retailers tend to ship smaller cargoes more often, which only increases their costs.
Obviously, some goods need to be shipped more often, but if that is not your case, try this method to reduce shipping freight expenses.
Be Aware of Additional Charges
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, be aware of additional charges for:
Maybe you didn’t know this, but carriers often perform other services than just driving.
They may have to load or unload the cargo, wrap some pallets, or make additional stops.
Such services are often not included in your cost estimate.
Consequently, customers sometimes end up being surprised when they receive their invoices.
Make sure you ask the company about all the extra fees you can expect, for this reason.
Some of the most common unforeseen fees come from not understanding and not applying accessorial fees.
In order to learn to recognize these services that may be extra charged, consider learning some of the shipping jargon.
The more you know about how to identify them, the easier it is to reduce and eliminate these costs.
Some common extra fees are:
Additional handling fees
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, go hybrid likewise:
In order to reduce freight forwarding expenses, you can try to use a mix of transportation.
A good combination of ground, air, and ocean transportation can reduce transportation time and cost accordingly.
Try to use the best of every transportation mode.
If air shipping, for example, is proving to be too expensive for you, but shipping via ocean will last too long, make a combination including ground shipping as well, if necessary.
Make sure you do the math because not all discounts have the same value.
Hire Carriers Based Near Your Ship-to points
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, hire carriers based near your ship-to points for:
But just because everyone is used to the standard ways of shipping and expenses associated with it, it doesn’t mean that is the only way you can do them
Customers often think that the way freight forwarders arrange shipments is pretty much fixed and cannot change along with it the shipping process all together.
By following the aforementioned and their following steps and start implementing the changes that will help you today, you can reduce the cost of shipping and simplify it.
If your ship-to points are on their regular route, it is more likely to get a lower rate.
Reducing the miles is a great way for you to reduce freight costs.
Hire carriers based near your ship-to points reduce freight forwarding expenses.
Choose Your Discounts Wisely
Since price may be a very important factor to consider when using shipping services including freight forwarding, reducing it will mobilize shipping and boost shipping companies’ revenues. Accordingly, choose your discounts wisely for:
The first thing you should look into when you want to reduce freight forwarding expenses are the rates given by a carrier.
Not all carrier discounts have the same value.
One carrier, for example, can have a higher base rate than the other one.
As a result, a lower discount from the carrier with the lower base rate can be more beneficial than a higher discount from the more expensive carrier.
Therefore, remember to always do the math and find the offer that gives you the best price.
There are many ways to optimize and improve international shipments from consolidation to arranging cross-docking, but if you plan to utilize all, we DIJLA would be happy to help you choose the right pallets, properly secure your shipment, and handle anything from custom packaging to customs clearance.
That is why DIJLA helps companies manage their shipping logistics so that shipping times can be optimized. We provide shipping solutions at every level of the shipping process so you can get the most out of your shipping budget without needing to deal with the hassle of complex shipping procedures.
What about allocating the whole process to one of the most well-known shipping companies globally that combines freight shipping, supply chain management, shipment tracking and other services, with a solid understanding of shipping methods and insurance, as well as a good grasp of overseas markets and regulations and equipped with specific qualifications involving the transportation of hazardous materials, oversized cargo or dangerous goods?
Indeed, it relieves you from doing thorough research from the start to see where your international shipping niche might be, paying lump sums when you can manage your budget and spend and the hectic of perceiving this hazardous chain.
DIJLA who is highly regarded for its shipment services to all Iraqi provinces and manages shipping documents for Iraq customs, is ready to provision the whole process for you from freight forwarding to shipping and logistics services, land transporting services, custom clearance services and door to door delivering services with the aforementioned specializations and qualifications and the handling of all these concerns to ensure your goods will reach safe and get imported to the destined customers efficiently.
From a modest beginning in 2011, DIJLA today boasts of working with reputed partnerships, an internationally accredited matrix of agencies that warrant us to extend effective services across the globe. From the list of shipping companies in Dubai, DIJLA Shipping & Freight Forwarding L.L.C is a leading Logistics and Shipping company since 2011. With offices in Dubai, United Arab Emirates, China, Iraq, we provide the art of international Door-to-Door shipping services, Air Freight, Sea Freight, Transportation services and logistics services. We manage and deliver globally different sizes of cargo, from small to standard to big sizes, with effectiveness and accuracy in order to meet the highest levels of Customer satisfaction. Our team comprises the wizards from the logistics industry who possess cognizance, acumen and foresight about this industry.