The proper management of inbound transportation is multifaceted. As a national retailer, one can expect partners in business to send shipments to facilities numbering in the thousands. Large manufacturers can have suppliers numbering in the hundreds. What is the most significant challenge of inbound freight management? Cost control.
Transportation Challenges
The going rates for transportation are rising. Shippers are reporting not only higher premiums on shipping that is expedited but added accessorial charges and elevated base rates. In an effort to manage these expenses effectively, search for logistics solutions, and control costs businesses are literally scrambling.
Inbound Freight Management
In order to effectively manage inbound freight, the goods and raw materials entering a facility must be moved in a cost-effective, efficient manner. Is estimated that 40% of a typical organization’s annual budget for freight is used for this process.
The Best Ways to Improve Processes and Cut Costs
Not only will companies notice an improvement in service, but when inbound freight management is improved, costs are reduced significantly. And cost is a concern to everyone. The following are ways of improving processes and cutting costs:
Optimize the process:
When you take control of inbound freight transportation you are essentially granting yourself the ability to optimize freight moves and visibility into the true costs of transportation.
You could be paying extra, however, if your suppliers are the ones controlling inbound freight moves. This is because the suppliers not only utilize the service like a profit center but bundle services for shipping into product prices.
Negotiate:
LTL routes inbound shipments to various facilities and is routinely responsible for approximately 75% of all inbound shipments. But there are ways to avoid the payment of excessive LTL transportation rates by shippers. By highlighting attractive freight, asking for a discounted fuel surcharge, using service levels that are guaranteed, and leveraging the Czar Lite Tariff, it can be accomplished.
Gain visibility into costs and identify vendors:
Your TMS software should be used to its full advantage. You may be able to minimize hours of labor and reduce congestion at the dock. By viewing custom reports, you can see if there is a way to consolidate your inbound LTL freight down to a single truckload shipment. This technology can be used to trace shipments, track them, and to monitor performance, check insurance, and monitor safety.
Ideally, all parties involved should benefit from an inbound freight process that is efficient. When it comes to management of any complex inbound freight process, the three keys are: better inventory, administrative competence, and reduced costs.
Effective and efficient transportation means sticking to a timeline and a budget. Whether using nationwide LDL trucking, local delivery, container drayage, express trucking, or some other form of product movement, the right 3PL company can take your business to the next level. Finding a company that is ready, willing, and able to be a part of achieving your goal of cost saving transportation is a key element. Commitment to that key element on a day-to-day basis is what the ideal 3PL partner will concentrate on and deliver to you and your company.