Many businesses have implemented LTL shipping practices into their transportation model because of the wide array of benefits it provides. But the costs associated with setting up such a system can be costly. You often have to pay for access to or implementation of new software. The additional time to develop LTL relationships and train staff on new practices translates to dollars as well.
While these costs may seem extreme at the entry, true cost savings are realized over long periods of time. Working hands on with expansive TMS software eliminates a great deal of frustrations associated with full truckload shipping and parcel shipping. Here are 4 ways to save on LTL shipping when using an integrated TMS software:
4 Ways to Save on LTL Shipping
1) Overarching Costs of LTL Shipping
The battle between LTL and FTL shipping will probably continue forever, primarily over the issue of price. Although LTL shipping is not cheaper for every business, cost savings can be realized circumstantially. If your company does a lot of short distance, domestic shipping of small shipments and packages, the cost benefits of LTL shipping greatly outweigh the initial startup costs. One of the ways to save on LTL shipping is by making sure that you fully adopt the mode for a good portion of your short-haul shipments. Depending on your circumstances, it’s probably not worth it to switch if you would only use it for a few, long-haul shipments.
2) Liability Insurance
Financial security and risk mitigation should be among your top concerns as a business. More important than a cheap rate is the assurance that the number will stay the same. Properly preparing yourself to combat price fluctuations is wise, and liability insurance is a great way to do that.
The type of insurance your business needs will vary depending on the type of services you are using. For example, a shipment that is traveling via both sea and land may need additional coverage, as not all marine liability coverage continues on land. On the off chance that your goods follow in the footsteps of Humpty Dumpty, your international cargo could lose its value without appropriate coverage. That will leave you as the shipper to pay the cost alone.
Shipper’s should understand their options when it comes to cargo insurance. For truckers, there are 3 primary options:
- General Liability Insurance: General liability insurance covers a truck, its occupants, and cargo whenever the truck is not
- Non-Trucking Liability Insurance: This plan covers damage that may occur when a truck is not in transit or housed on company premises.
- Primary Liability Insurance: Primary liability insurance is perhaps the most crucial type of insurance for any carrier to have. Often times, the minimum coverage for this insurance is $750,000 but higher coverage rates can be purchased. For example, additional insurance may be purchased to cover individual trucks and occupants if the truck driver is at fault or if another driver’s insurance does not pay for damages when the driver of the passenger vehicle is at fault.
3) Customer Satisfaction
Anyone who has dealt with customers can tell you that customer satisfaction is directly linked to the financial well being of a company. Angry customers can drag a business down while happy customers allow the company to experience potential growth. With transportation, LTL shipping can help to reduce the delays commonly experienced in FTL shipping and help to improve customer satisfaction all around. Although there are plenty of cases in which shipments are delivered on time but items have been lost or damaged, and this can lead to insurance claims and processing costs.
Customer feedback is also linked to the probability of audits. Negative feedback implies that a company is experiencing internal problems during order fulfillment or shipping. While past company audits may not have revealed any issues, direct customer feedback can lead auditors directly to the source of the issue – truckers, distribution centers, warehouses, manufacturers, etc. Businesses can benefit greatly from performing routing preventative audits to address all customer feedback and turn it into useful, instructional data. Finding ways to save on LTL shipping may include exploring other points of interest in your operations to streamline your logistics processes.
4) Performance Reviews
Just as it is important to track customer feedback, maintaining an organized way of reviewing your Key Performance Indicators (KPI’s) is crucial to keeping costs low and customers happy. As a general rule of thumb, your KPI analysis should revolve around tracking your company’s accounts, transaction records, documents, and inventory. A simple of audit of these key figures can help to identify issues and get to the bottom of bottlenecks in your operational procedures.
It’s important to note – auditing should not have a negative connotation. It’s not a government conducted study that results in fines. Preventative auditing is just another one of many ways to save on LTL shipping since it aims at identifying problems before (or immediately after) they occur. This same concept can be applied to employees of a company. Management can perform internal employee “audits” to identify whether or not training and coaching has been effective, and if not, to instill practices to reactivate a team or employee’s performance.
Less than truckload shipping often involves many moving parts and different vendors. One of the best ways to save on LTL shipping is to use a 3PL, like Interlog USA, to help you organize and manage you LTL shipments. Companies like us are able to compare and contrast your KPI’s with industry standard benchmarks to ensure that service quality, transit time, communication, and costs are never imbalanced.
Less than truckload shipping is a very complicated mode, but doesn’t have to be difficult. Any company’s success or failure with the mode will be dependent upon their willingness to leverage the right technology and industry relationships. Joining a contract with a freight forwarder like Interlog USA can often provide the additional “boost” a company needs to improve their service quality and minimize their overall LTL costs.
There are many ways to save on LTL shipping. If you are looking to learn more about how you can lower your LTL costs without sacrificing service quality, call a team member at Interlog USA and we would be happy to help you! We have years of experience in the industry and are glad to share our knowledge.