Reducing freight costs and maximizing return on investment (ROI) are crucial for any logistics or freight company. Shipping and trucking costs are continually fluctuating, but there are some ways to increase cost-efficiency and maximize ROI. Heavy Weight Transport knows that understanding how freight shipping rates are calculated is the critical first step in optimizing your shipping and trucking costs. Time is money, and increasing overall efficiency between cargo loading and transport while maintaining safety and security is the key to maximizing ROI.
Understanding Freight Shipping Rates
Many different factors go into calculating freight costs. Most logistics companies, including Heavy Weight Transport, offer some type of quote calculator. These calculators take into account all the factors of a shipping rate: type of commodity, container size, shipping route, mode of transport, and fuel prices.
Type of Cargo
Different types of cargo have varying shipping requirements and costs. Bulk commodities such as grain, perishable goods, electronics, and medical supplies may have specific requirements for temperature control and storage, which affects freight costs.
Mode of Transportation
The method of transport can dramatically impact the cost due to fuel requirements, space, staffing, and timing. The freight rate between air, sea, rail, and trucking varies significantly, with air cargo usually being the most expensive.
Shipping Route
The distance required, as well as the number of stops to get from the initial point to the final destination, affect the total cost of transporting freight. Longer routes, with more stops or more complex roadways, will result in higher costs.
Fuel Prices
The cost of fuel is a significant factor in determining freight rates. Trucks, planes, and ships generally rely on some form of gasoline fuel, which varies in cost due to the supply and demand of oil across the globe. The more fuel-efficient a shipment is, the less fuel prices impact total freight cost.
Permits, Taxes, Fees
Depending on where the cargo is coming from and where it is going, import fees and various taxes may be associated with the freight shipping rate. Oversized or overweight trucking costs include the necessary permits for carrying the cargo.
Maximizing Budget for Freight Costs
There are a variety of ways to maximize the use of your overall budget for freight costs and increase ROI. These tactics include optimization of cargo loads, integration of technology, and finding the right logistics partner.
Intermodal Transportation
Rather than relying on one specific mode of transportation, using intermodal transport can decrease overall shipping costs. Intermodal transport is using a combination of different modes of transport to move products. These shipments make it simple to carry cargo, generally not removing cargo from shipping containers until the final destination. Shippers using intermodal transportation enjoy lower prices than other approaches, partly due to low handling costs. Intermodal transport allows shippers to mix and match methods of shipping in order to create the most efficient and cost-efficient way to get products from point A to the final customer.
Route Optimization
Analyzing potential shipping routes to determine the most efficient path by minimizing actual distance, fuel consumption, and travel time is critical to maximizing ROI. Route optimization software aids shipping companies in identifying opportunities for improvement.
Consolidation of Cargo
It’s cheaper and easier to send one truck across the country than two partly-filled trucks. Consolidating shipments when possible improves fuel economy, reduces environmental impact, and limits the number of drivers and crew needed. By reducing empty space in containers or trucks, you can maximize the value of each shipment. Consolidating cargo may require some increased flexibility in delivery timelines. If there is room for flexibility and for increasing lead time on shipments, focusing deliveries for off-peak days and times can lower costs. During peak shipping seasons, rates may rise due to increased demand for transportation services.
Loading Freight
Anyone who has ever loaded a Uhaul understands there is a specific skill needed when it comes to loading and unloading any type of cargo container. Ocean shipping containers are no exception. Strategically loading freight into a shipping container can save time and, therefore, save money when it comes to unloading the cargo. The real-life game of Tetris that comes with loading any type of truck or container is made easier with modern technology.
Technology and Digitization
Investing in freight management software, systems, and applications can streamline all aspects of freight and logistics. Automation tools can help optimize scheduling, routing, and documentation tasks, leading to greater efficiency and cost savings. Load planning software and programs can virtually organize cargo in a shipping container, test weight distribution organization, and increase efficiency in loading and unloading.
Cargo Tracking
Container and cargo tracking helps shippers stay alert for potential problems and ensure deliveries make it on time. Heavy Weight Transport fleets are equipped with GPS location technology, allowing our customers and clients 24/7 visibility of their freight shipments.
Collaboration and Negotiation
With any business, negotiating competitive rates, evaluating multiple vendors, and collaborating with other businesses are smart moves to increase ROI. In the freight industry, choosing the most cost-effective mode of transportation with the most efficient carrier helps to lower overall costs. Heavy Weight Transport may be a suitable carrier for your business, especially if your cargo is overweight.
Collaborating with suppliers, customers, and logistics partners to coordinate shipments, deliveries, and transport is another good way to maximize profit. Aligning the processes and goals across your supply chain optimizes overall freight operations.
Monitoring Freight Costs for Continuous Improvement
Costs are constantly changing for just about everything, and freight costs are no exception. Monitoring and understanding industry and economy trends, such as the price of fuel, can lead to continuous improvement of your ROI. What may have been the best budget-friendly cargo solution a year ago, or even six months ago, may give way for a more cost-effective freight rate today. Heavy Weight Transport understands the current trends in freight shipping rates and how to utilize your budget to provide the best ROI. We also understand that the logistics industry is ever-changing. As new technology affects efficiency and freight rates, we are working to maintain the best, cost-effective services on the market.
Heavy Weight Transport is the ideal shipping and logistics partner. Heavy Weight Transport has a budget-friendly solution to fit your shipping needs, from oversized shipments to drayage to cross-docking. Contact us for a quote.
