LTL yields for carriers were up 2.4% in 2016 after revenue was down in 2015 due to a much softer market the past two years and newer challenges faced by carriers.
Pricing is expected to increase in 2017, and according to estimates from Stephens Inc., one can expect those numbers to be up from those of the last quarter by low single-digit increment rates.
Most LTL carriers are not flexible on their pricing models and while many shippers think they can save money by negotiating lower rates, there are more effective strategies to cut expenses on less-than-truckload (LTL) shipments.
As LTL pricing is set to increase further in 2017 due to fuel costs potentially going up too, shippers would be better off cutting trucking costs on LTL freight shipping by employing surefire cost-saving strategies. Some of the strategies proven to be effective include, being exact with packaging and palletizing the freight properly, considering consolidation, working with a 3PL and using better transport management systems.
Packaging and Palletizing
Aside from being accurate with measuring the weight and dimensions of shipments, proper packaging is a great way to ensure carriers can move your shipments safely and easily. Shippers who are palletizing their freight need to put boxes in upright position use slip sheet and stack the pallets in a way that protects the contents.
A major concern for shippers is that the condition of freight is undamaged at its destination. By making sure that pallets are packaged to increase strength and stability, these additional shipment charges that are often incurred can be avoided.
Here are some steps to take in packaging:
- Shrink wrapping the shipment together with the pallet to avoid sliding
- Maximizing the shipment’s density to allow stacking by carrier
- Decking the freight with an extra layer to support stacked weight
- Maximizing space by packaging pallets to the exact height and edge requirements specified
Consolidation of LTL shipments can significantly increase savings. It is a proven method for shippers to cut down on costs and decrease emissions while doing so.
Creating a system that ensures that shipments to the same location are consolidated into a single daily shipment, helps companies lower transportation costs and inventory while driving consistency and efficiency.
Load consolidation between different facilities and divisions can be achieved by forming a program or consortium that improves truckload utilization. Getting more people on board will increase shipment volumes and allow companies save money by converting LTL shipments to cost-effective full truckload shipments. More volume will also provide shippers with more leverage when negotiating a collective discount with carriers.
Smaller companies that rely on untrained hands or one-person transportation/shipping departments, will find that working with a 3PL company will provide them with the LTL technology that they otherwise may not have access to.
Without logistics managers or well-trained employees, a small or mid-size business will save money on transportation costs by partnering with 3PL companies. Efficient management systems and better technology will streamline the LTL shipment process by providing shippers with assistance on rates, invoicing, carrier selections and most other aspects.
These systems will in turn decrease the inbound and outbound freight expenses for companies and reduce administrative costs by automating most of the processes involved with transporting LTL shipments.
Justin Bright – CEO Brighter Logistics