For every entrepreneur, one of the ways to raise your business revenues is by minimizing business operational costs. Operational costs may include taxes, wages, water bills, and electricity bills, among other costs. For companies that operate online stores, your customers may order goods and demand that you ship them either by air, sea, or road. All these are added costs that you have to be strategic about to keep to the minimum as much as possible, without negatively affecting your business.
In case you’re starting in the shipping business, you need to shop for a container liner with favorable shipping costs for all your bulk shipping needs. Ensure that you use a trusted shipping company that’s licensed and has an insurance policy that guards your goods while on transit. In case of damage to your goods while on transit, you can be compensated.
To give you more exposure on the shipping industry, this article outlines eleven strategies you can use to keep your shipping costs as low as possible.
- Leverage Off-Peak Season
Monitor the shipping rates of your shipping liner so that you can know when their rates are the lowest. Shipping your products at such a time can make a big difference in your shipping costs. For some liners, Friday is off-peak as their clients require to have their goods at their premises by Thursday, so that they may store them in the warehouse on Friday, ready for sale during the weekend. Mondays are also favorable days for most shippers.
Moreover, the kind of goods that you’re shipping can affect your costs. Canned goods tend to have a longer off-peak season compared to fresh products. Therefore, if you deal with products that aren’t easily perishable, maximize on off-peak seasons.
- Strategize On Packaging
The volume occupied by your cargo is what determines how much you should pay for your goods. The more space it occupies, the bigger the cost, and vice versa. As much as you can, reduce all dead space. Ensure that your packaging is good for the nature of your goods to reduce breakage on transit. The poor package gives your liner more work of monitoring your carriage, which may raise the shipping costs.
- Choose Your Carrier According To Strength
Many shipping liners do have certain preferred routes and destinations. Thus, it means they’ve established themselves to work in those areas. When choosing a shipping liner, check whether they operate in your region of interest. A carrier that’s outside your region may not be able to offer competitive shipping quotes. Additionally, ensure that the carrier you choose can transport the kind of goods you have. For refrigerated goods, your liner needs to have freezers to ensure that your goods arrive in a good state.
Where it’s difficult to get a new carrier, you may talk to your carrier to see whether they can begin a line dealing with the nature of your goods or your region so that you can continue to enjoy their rates.
- Ship Less Regularly
Shipping in large quantities is more economical compared to many small consignments. Large volume customers enjoy better rates compared to their small volume counterparts as the carrier takes a shorter time to process, load, and offload. Thus, you can pile your goods to a good volume to enjoy the benefits of large volume shippers.
On the other hand, regular shipping increases your inventory which also increases your inventory carrying costs.
- Try Hybrid Transportation
Where necessary, you can try a mix of the different modes of transport, which are water, air, or land. This is a good strategy as, with it, you want to save on both cost and time. So, time and cost being the factor, see which of the three modes of transport or if all of them can be cost-effective for your time and money.
- Be Insured
Ensure that the shipping company of your choice has their insurance cover up-to-date or that you’ve bought an insurance cover for your inventory. Besides, read the insurance cover by the company to know the extent of the cover so that you don’t have to spend more money shipping premium services and goods.
- Leverage Automation
Automating some of the shipping procedures and processes may help you avoid errors, cut on paperwork, and prevent or shorten delays, especially at border points. Automating such procedures may also save you time and money, as well as mitigate risks from invoice errors and damaged inventory.
- Try Goods Consolidation
Consolidation requires you to purchase your goods from different retailers in the same country instead of in different countries. Although it might cost you more time, it can save you on costs. Once you’ve brought the goods together, you can now pack them into a bigger shipment so that you can enjoy the benefits of shipping in large volumes.
- Give Your Carrier A Long Notice
Giving your carrier a good time notice helps them to invest in assets and capacity. Shorter notice may force them to get additional equipment, and the costs of doing so will be transferred to you. Therefore, forecast when you anticipate shipping your goods so that your carrier will have enough time to organize and plan their labor and equipment for better rates.
- Leverage Relevant Technology
Manual spreadsheets and paperwork have been outdated by current cutting-edge technology. You can invest in software, such as transport management systems, yard management systems, and warehouse management systems, among others, that can help you cut on supply chain costs. This technology is important in helping you to automatically generate invoices, compliance requirements, cross-border paperwork, and other documents, which can cut down on shipment delays and labor costs.
Besides, you can also develop a system that helps you reduce administration, removes POD requirements, and permits apt payment to your carriers, which can significantly help in reducing overall transportation costs.
- Understand Fees And Charges
Carefully study past invoices to know additional charges that you should avoid. You might be charged an extra fee on trailer demurrage, re-delivery fees, and driver retention. Maximumly cooperate with your carrier to avoid such charges. Moreover, you can maximize your shipping schedule to avoid layovers, storage lapses, after-hour deliveries, and not used (TONU) charges.
In case you realize that you’re charged more than you expected, talk to your carrier to understand the charges so that you can avoid them in the future.
Saving on any unnecessary expense for your shipping business can translate to thousands of dollars in the long run. You only need to be aware of the areas that you can leverage shipping benefits and the things you can do to avoid additional charges. Putting into practice the strategies in this article can help you significantly lower your freight shipping costs.
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