The huge web of full truckload domestic freight shipping network can be intimidating to any newly established or established business. If you’re not shipping the same item to the same destination over and over the same time, a variety of aspects will impact your domestic shipping costs. Consideration of distance, weight and delivery times is only the beginning of the list when it comes to choosing the right design for your shipping needs, and a deliberate and well-thought out strategy can save you lots of money and headache later on. Making calculations for rates and formulating transport routes is just as much an art form as the science behind it and a solid knowledge of the business and a well-thought-out plan will ensure long-term achievement.
A third-party logistics company (3PL) can assist in reducing the process, and enhance your ability to navigate the rivers of transportation throughout the country. A 3PL is often a mediator in price as well, the 3PL can arrange special rates and discounts and help companies achieve their goals and ideals, for instance, getting products to their destination on time and at the best cost.
When selecting a 3PL or training your own department of shipping, there are many factors to think about, and a clear strategy is crucial for everything else to go according to plan. In the beginning, you must understand the way that shipping companies look at your product. Then , you will be able to determine the best way to get your product to your customer.
What is the factor that determines the cost of freight?
Commodity
The first consideration is the concept of commodity. What is the product you’re selling? Does it have to be perishable? Are you able to tell if it is heavy? Fragile? It is important to understand your commodity and the way that shipping companies view the logistics of shipping your product.
A freight class is assigned to your product(s) once they’re prepared to be shipped. Shipping costs will be affected by the freight class, which is broken up into 18 elements based on the weight, density, dimensions, the value of items and their liability, the transportability, and capacity for storage. If your product can be placed on pallets, containers, crates or barrels, then the shipper must adjust their load according to the class of freight for your shipment. A lot of thought must be given consideration to the manner in which you want to package your product. A smaller and more manageable package for the shipper will mean a lower price.
If the size and weight of your items remain the same, you can typically opt for a per-item, zone-based approach, where the cost for shipping is determined by your location of delivery and not by weight or size.
Time to deliver
Pitney Bowes, a global technology company, reported in 2014 that an impressive 93% of consumers acknowledge the importance of shipping choices as an important aspect of their online experience — up from only 24% in 2014.
Not only that, but 88% of people who were surveyed considered free shipping to be a more attractive offer to purchase even if it would take 7 to 7 days, as opposed to the cost of a delivery service that is 1-2 days.
Timely delivery is an essential element of any business. Offering choices for customers such as 1-2 days or 5-7 days or free shipping ought to be considered in order to avoid customers looking elsewhere. This is why you need the ability to ship the product to them via different channels. A 3PL can help find the best routes and processes for delivery.
Location
The distance traveled can affect the cost, but directness and modes of transportation are the reason. Packages are loaded from pickup destinations, and then trucked, trained, or flown either direct to their final destination, or transferred to central hubs, which are also known as Distribution Centers (DC). The DC’s are where truckloads are combined to increase the capacity of a truck. They are then routed through major channels. If your package is loaded and unloaded “dock-to-dock” without the need for lift-gate services The cost is significantly less than if it needs to be delivered to a residence or an inside delivery. If your product has delivery to a restricted access facility, such as the school, church, or even a store, additional charges will be charged. Other Accessorial Charges such as fuel price increases could increase the cost of shipping your product.
Shipping options
Does your product fit in a 1st class envelope? Or on a flat-bed 18-wheeler? Most likely, it’s in-between. Knowing the pros and cons of each mode of transportation could accomplish for you can help you decide how you would like to move your cargo. When you’ve identified your product and know how to package it to maximize its value for freight, you can focus on how you can get it where it is required to be.
Documents and parcels
There are a variety of options for shipping smaller packages. Everything from envelopes or a box of up to 150 lbs fall into this category. Making sure you have a good connection with a transporter can be a lengthy process, so it is worth researching price and options in advance.
Selecting the 3PL
If your business expands, and your network grows, it is helpful to have a knowledgeable team to handle your shipping needs. The cost of transporting products through the supply chain has been steadily increasing, and the complicated nature of transportation management might be best left to a third party. Research shows that 3PL’s typically have better shipping rates and have greater resources to speed up the delivery of your product. The experts estimate that companies could expect that freight costs to typically represent up to 10 percent of their total costs which is a substantial amount to be aware of and use the most efficient methods to minimize. But choosing the right 3PL isn’t as easy as choosing the most affordable or the largest. Selecting the right fit to your business’s needs is vital. The success of your business should be measured by a long-term and profitable relationship.
When choosing a third-party Company for Logistics (3PL), here are some things to consider:
How will your item be shipped? Does the 3PL equipped to handle every possible transportation options, rail, air or waterways? Analyzing how the 3PL handles similar products to ones you have might provide insights into how yours could be processed.
Value-added services. What will you require to move your product? Re-palletizing or custom packaging, white-glove services, warehousing? While many of these and other options will cost more the 3PL 3PL can usually negotiate terms and offer the best rates.
Recognize your company’s core value system. Selecting a 3PL signifies that you will be working closely together to come up with an efficient method of carrying out your delivery procedure. The 3PL must, therefore, be an integral part of your company and must consistently reflect your goals and principles. Does the 3PL have a knack for customer service? What is your company’s feeling of urgency? Does the 3PL feel the same? Do you sense a feeling of team play — of people working together to make things happen? Do the dimensions of 3PL match yours? Is it too large that you are worried that your business isn’t getting the personalization you desire? What international services does the 3PL offer? Your company’s core value system must be in place at the outset. Creating a long-term, healthy relationship with the 3PL is contingent on a shared vision of your immediate strategy and future objectives.
What are the best ways to measure ROI? When you choose to contract out your transportation requirements How do you determine if it you’re getting the most bang for your buck?
If you are trying out an 3PL system, make use of key performance indicators such as:
– On-time performance
Loss or damage to product
– Billing accuracy
Costs (and hidden cost)
Communication is easy
– Problem solving through creativity
– Competitive discounts
– Elimination or reduction of accessorial charges
Best use of transport and routing
– Consistent performance reports
In the current competitive environment, shipping has taken on a role of such significance that many consumers regard it as their top priority. The image of a business could be damaged or created through a handful of reviews based on the speed and quality of the service your business has promised. It is logical for every company, no matter how big or to establish a solid domestic freight shipping plan to make sure your products are arriving promptly and at the highest price possible.
