The Freight Connections shipper and trucker education center.
Reducing shipping costs is very likely the goal of any shipping/logistics manager or coordinator. In many cases, people holding those positions receive their annual or quarterly bonus based upon their performance in reducing these costs. The problem most people have in this situation, is that they are still ultimately responsible for making sure products get to the customer when and how the customer expects that to happen AND to reduce the overall cost of shipping at the same time. No matter who you are, or how much experience you have, this is a difficult problem to solve. A good broker / 3PL coordinator can really help by taking these things into consideration for you, but not everyone has a broker they can trust. Here are some tips to help you get your bonus and do well with job performance.
Booking freight to be moved is a lot like booking travel. If you have to fly on Friday, and return on Sunday, you'll pay a premium price. This is simply because business travel is very high volume on those days. People fly home Friday night, and they have to return Sunday night or Monday morning. If you fly Tuesday and return Thursday to and from the exact same destination, the flight can cost hundreds and even up to a thousand dollars less. This is the same for hotels. Shipping freight also requires good shipping coordinators to take days of the week and much more into consideration when booking freight at competitive rates.
Here are just a few of the major time considerations to think about when booking your freight.
Let's look at these individually:
The most common mistake people make with the date the load will be ready is assuming that the load MUST be picked up that day. This usually isn't the case. For some shippers, the load can sit for weeks once it's ordered. The day it's ready is usually just the earliest day it can be picked up, not the latest. When you contact your broker or trucking company, make sure you let them know up front you've got a few days or weeks to get the load picked up if you do. This really helps protect your rate and allows both brokers and truckers to use the load as a backhaul (more on that in further editions) and then passing that savings on to you the customer. Remember, if you have time, use it. When you get a quote for the load, just tell the person giving you the quote that you'd like to get a better rate and that you can wait on pickup dates until they find you one.
Similar to our pickup dates and times, if your delivery dates are also flexible, use that to your advantage as well. Sometimes you may need to get an item shipped on a specific day, but you've got much more than the allotted travel time you need to get it to its destination. This can also work to your advantage. Maybe the company hauling the load would like to get their driver home over a weekend. If that's allowable with your load on thier trailer, they'll be willing to take the load for less money. There may be any number of reasons a truck may prefer to have flexible delivery dates, but in the end, if you don't use them to your advantage, you're leaving money on the table.
A good broker or trucker can help you here. Let's say you have a load ready to be picked up on a specific day. That load also has a specific day it needs to be at its destination. Knowing the exact travel time can help you figure out how much flexibility in pick up and delivery times you actually have. If you are sending something cross country for example, team drivers can save you one or two days. You could then use those days to be one or two days more flexible in your pick up and delivery dates and save yourself some money.
This is possibly the most commonly misunderstood aspect of shipping. Load volume increases as we approach the end of each month, and especially at the end of each quarter. Most quarters end on the last day of March, June, September and December. Shippers need to understand that their company can invoice their customer when the item SHIPS. Very often at the end of the month and quarter, sales and marketing departments are pressuring manufacturing and shipping to get things out the door! They want the orders invoiced so that they make their monthly or quarterly quotas and or get their bonuses. Publicly traded companies have even greater implications for the end of quarter / month.
That said, shippers should try their best to avoid shipping on those days. This can be extremely expensive as most people are also trying to ship on those days. Truck supply goes down and price goes up. NEVER order a truck on the last day of the month or quarter if you can avoid it. That can end up costing quite a bit of money because you'll likely have to pay someone to dead head from another area to come get your load. Try letting your broker know in advance if you need a load picked up at the end of the month or quarter. They may still be able to get you a good rate if they have been given warning about the upcoming load.
In general, trucks like to unload in the morning and load in the afternoon. That's the pattern most smart trucking companies like to follow. Shippers should take this into consideration when booking a load to be picked up early in the morning. If you want a load picked up early in the morning, you need a truck that got empty the previous afternoon and has nothing on it in the morning. Remember, most trucks like to load in the afternoon and deliver in the morning. If you demand a morning pick up, just be aware that you are limiting the number of trucks you have to choose from since most of them will be loaded in the morning. Limiting the number of trucks you have to choose from always has the potential to increase the rate.
The bottom line is that timing matters. In an ideal world, shippers would only ever pay a backhaul rate and truckers would never roll empty. Working closely with a good broker can help you with these considerations and even help mitigate your costs even if you have to ship at a time that is typically more expensive. Look to work with people who help you meet your customers' needs and take it seriously while using their experience and leverage to help save you money.