The freight “rate” is only part of the equation. Many people miss key elements when trying to cut freight costs.
To understand freight rates fully, you need to look at rate structures and consignment profiles. Your freight carrier already considers these factors to optimize logistics and ensure competitive pricing.
By focusing on these elements, you can achieve more substantial cost reductions.
Watch the video below to learn more.
Rob: This week, we’re discussing common mistakes with freight rates. Urszula Kelly is here to share her insights. Welcome back, Urszula! It’s great to have you. It’s clear there’s more to freight rates than just the cost. What are some key mistakes people make?
Misjudging Freight Needs
Urszula: The first mistake is not considering the freight profile and volume. For example, if you’re shipping 8-10 pallets weekly between Sydney and Melbourne but paying full trailer rates, you’re not getting the best value. Many clients are charged rates that don’t match their actual shipping needs.
Rob: That’s a great point. Often, clients think they have good rates but miss out on better options for full truckloads or specific pallet volumes.
Unlisted Charges on Rate Cards
Urszula: Another issue is incomplete rate cards. Unexpected charges like marriage fees or loading costs can surprise clients. It’s crucial to include all possible charges to avoid issues later.
Rob: Understanding your operation helps avoid these surprises. I recall a situation where excessive charges were incurred due to slow loading times.
Regular Review of Rates
Urszula: Lastly, not reviewing rate cards regularly is a common mistake. Ensure you reassess your rates every 6-12 months to stay updated with market rates.
Rob: Absolutely. Market conditions change, and so do your shipping needs. Regular reviews are essential.
Dive deeper into this topic by watching the full video above.
Related articles on this topic have appeared throughout our website, check them out:
- 10 Freight Management Mistakes and How to Avoid Them
- Freight Benchmarking: What Is It? Why Do It?
- Why Containerised Freight Shipping is Daunting for SMEs
- The Challenge of Freight Container Utilisation and Why it Matters
- Container Freight Costs and Forecasting: Intrinsically Linked & Frustratingly Challenging
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated September 20, 2023, under the title “Freight Rates & Reducing Your Logistics Costs“.