Changing suppliers to save on freight is a last resort. Most freight savings come from changing how you order, how you package, and how you negotiate - not from changing who you buy from.
Where Freight Costs Come From
Freight cost is not just the carrier rate. It includes dimensional weight charges when your packaging is oversized, fuel surcharges that fluctuate monthly, accessorial fees for residential deliveries or liftgate requirements, and the premium you pay every time you use expedited shipping because an order was not planned far enough in advance.
Expedited freight costs 30 to 50 percent more than standard freight. Every emergency order you place is a freight surcharge you chose to pay. Planning further ahead is the cheapest freight reduction available.
5 Ways to Pay Less for Freight Today
Consolidate Shipments
Two shipments per month from the same supplier almost always costs more than one. Combine your orders where possible. The reduction in fixed costs - documentation, handling, and base carrier fees - adds up quickly when you are shipping regularly.
Negotiate Volume Rates
If you ship with the same carrier regularly, you have negotiating leverage. Ask for a volume discount based on your annual shipment count. Most carriers will provide one. Most shippers never ask. A 10 to 15 percent discount on a regular shipping lane is achievable with a single conversation.
Right-Size Your Packaging
Dimensional weight pricing means carriers charge based on the volume of the box, not just its weight. A product shipped in a box twice its size pays twice the dimensional weight charge. Audit your five most-shipped products and verify the box size matches the product size.
Compare Carriers Every Quarter
Carrier rates change. The best rate you negotiated 18 months ago may not be the best rate available today. Set a quarterly reminder to get a competitive quote on your three highest-volume shipping lanes. Even if you stay with your current carrier, the comparison gives you leverage in your next negotiation.
Eliminate Expedited Orders
Track how many of your shipments in the last 90 days were expedited and why. In most businesses, 80 percent of expedited orders come from the same three causes - late reordering, demand spikes that were predictable, and supplier delays that were not caught early enough. Each of those causes has a process fix.
The One Number to Track
Calculate your freight cost as a percentage of total landed cost per product. If freight is above 15 percent of landed cost on any product, that product has a freight problem worth solving. Below 10 percent, freight is likely well-managed for that product.
For more on this topic, read Total Landed Cost - What Freight Actually Costs Beyond Unit Price. You may also find How to Read a Commercial Invoice Correctly useful for the next step.
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