Redwood Blog

3 Ways to Lower Shipping Costs

In today’s shipping industry, shippers are always looking for ways to lower their freight spend. With so many factors influencing the cost, freight quotes can fluctuate wildly. This fluctuation can be due to having undesirable problem lanes, natural weather patterns, and the supply-and-demand nature of the shipping market just to name a few factors. But proactive shippers can help to control their freight spend and insulate themselves from wild fluctuations in the market. Here’s three ways:

A volume dial that reads 'Costs' and is pointed toward Minimum. Lower your costs with a broker.

1. Partner with a broker or 3PL.

Partnering with a 3PL comes with many cost-saving benefits. Two in particular stick out when working with problems like seasonal demand, weather, or problem lanes.

A 3PL can tap into hidden capacity by utilizing private fleets and dedicated carriers. Private fleets have several advantages. Drivers on these lanes have a consistent high level of service since they are often paid more (about $20,000 a year more!) than their for-hire counterparts and because it is often the same driver on the route. Your customers will get to know the driver and the driver will get to know the facilities, resulting in easy, smooth pick-ups and drop-offs. Best of all, since your freight is filling a backhaul, your rate won’t increase during seasons with a significant demand.

Secondly, a top tier 3PL will use data-driven pricing based on historical cost data and pricing algorithms. Without a broker, you run the risk of overpaying. A 3PL can find you the best truck for your freight on a specific lane, taking into account mode optimization, historical carrier performance and the probability of the carrier accepting the load.

2. Doing extra research when entering markets in new regions.

If you regularly ship flatbed loads in the south, you may be surprised at the cost of shipping up north during the winter. Tarping a flatbed truck in the snow isn't easy, and it comes at a higher price. On the flip side, if you try shipping something down south during hurricane season you'll also see prices increase wildly. Educating yourself on the seasonal price changes in your new region can go a long way to shielding you from the extra costs. You'll know how much more you can expect to pay during different times of the year, and will be able to tell a fair quote from an unfair one.

This is another example where partnering with a broker can help. National brokers have logistics experience in every part of the country, in every kind of season and weather. They can help you figure out the best way to ship to a new part of the country at the best price.

3. Know when to use Intermodal, LTL, and Truckload shipments.

Depending on your specific needs and freight, switching modes on a shipment is a powerful way to save money on shipping. A broker can look at pricing for the same freight in different modes. Perhaps switching to intermodal or using a reefer can help to lower your freight spend–a broker partner can work with you to craft creative solutions that fit your needs.

An intermodal load is one that changes transportation methods at least once on its way to the final destination. Often, intermodal loads use combination of trucks and rail. Taking advantage of more than one mode of transportation saves you an average of 20% in shipping costs. If your shipping or arrival times are flexible by a day or two, your load might be a perfect candidate for intermodal.

LTL shipments make the most sense for loads that need to arrive quickly, or if you need to reduce your holding costs. By shipping less-than-truckload, you don't have to wait to fill a whole truck with inventory. If you have many small LTL shipments to make often, you might be able to lower your freight spend by pooling loads and converting to full truckload. Converting LTL to Truckload is known as freight consolidation. It reduces cost, paperwork, prep time, and shipping headaches.