When it comes to the daily operations of shipping and logistics, the costs of travel and freight transportation are highly important. The various associated costs of these global activities can directly translate to the decisions, methods, efficiency, and revenue of involved businesses and individual parties. It’s essential to know the details, changes, and possible fluctuations in these costs to make the best decisions for your unique needs and that of your transportation company. In this article, we’ll discuss what you need to know about transportation rates, including the cost of transportation, the cost of drayage, and how you can effectively reduce these costs for success.
Cost of Transportation
There are various costs to the shipping and transfer of freight and other goods worldwide. These costs can impact the shape and method of many transportation activities. Delivery and transportation can be the most expensive aspects of logistics by a significant margin. At the root, the costs of transportation include the various expenses related to the transport of finished products, raw materials, and related employees. These transport costs are essentially the funds that help ensure that all moving parts reach their given destinations. These costs also help ensure that a business’s customers receive their service or products in a timely manner.
The specific area that can cost your unique business the most money greatly depends on your given industry. For example, with a distribution company, a majority of the revenue is appropriated for a range of transportation activities. Meanwhile, for a software company, for example, transportation costs may be relatively low on average as they may transport only a small number of field sales representatives on a regular basis. There are many kinds of transportation that can contribute to your overall business costs, thus affecting your revenue and revenue potential. The most expensive form of transport is by air, making intermodal transportation highly impactful.
Cost of Drayage
Transportation costs businesses in the United States more than $1.04 trillion, which is the same amount as approximately 10.4% of their combined revenue. There are various transportation costs to know and consider when making informed decisions on your end. One of the most commonly known types of transportation that can accrue associated costs is the large-scale transportation of goods and retail products. Large containers of this diverse freight travel by freight trains, cargo ships, and drayage trucks. Some of the basic costs of these travel activities include line haul, pickup, terminal handling, billing, collection, and delivery costs, many of which can be considered drayage costs.
The cost of drayage is essentially the cost of the involved travel and transfer of freight, as drayage involves the short-distance transportation of various types of freight. Depending on your specific arrangement, there may also be involved costs for buying and maintaining insurance. For this reason, it’s vital to carefully research and choose your given carriers and build close relationships with them in order to take advantage of special deals and other opportunities to decrease costs and increase efficiency and revenue. The costs of your logistics act as a big aspect of your business’s operating costs, thus impacting your ultimate profitability.
Reducing Your Transport Costs
When discussing drayage and other transportation costs, one of the most important things to know is how to effectively reduce these costs, enabling your unique business to have a higher amount of revenue and ultimate success in its endeavors. As the cost of general transportation can include how much it costs to transport raw materials, finished products, and involved employees between two or more locations, these are essentially the top areas to focus cost-cutting efforts. Despite the assumption held by many shippers that the methods for shipping freight and the related costs are set, there are methods for addressing and decreasing them.
When it comes to reducing your transport costs, contracting steady lane volumes can save you by decreasing the number of overall shipments and increasing the efficiency of your given carrier. You can also reduce transport costs by focusing shipments on off-peak days. Shipping a day early or more can provide significant savings. Mondays and Fridays are often off-peak days for retail. Another means to reduce costs is to develop network connections as opposed to consistently shopping around for shippers and carriers. You can also consider increasing delivery lead times, reducing dunnage, and building your reputation for quick loading.
Reducing Your Drayage Costs
If your shipment activities involve drayage specifically, it can also be very impactful for you to know some of the top methods for reducing drayage costs. One of the best ways to effectively reduce your drayage cost is to have a good understanding of its calculation. The calculation of these rates is at a cost per every 100 lbs (CWT). There is also a 2 CWT minimum charge, which is for 200 lbs of freight. Every shipment is essentially subject to this minimum charge. This minimum charge is a major reason why consolidating shipments to meet this weight minimum charge can positively impact your drayage cost.
It’s also helpful to consider ways to ship more directly to a given show site. Shipping more directly to a show site is one of the easiest ways to reduce drayage costs. Be sure to also understand and adhere to any target times and dates to avoid any additional surcharges. There can also be special handling fees, depending on the specific freight you’re trying to ship. Another way to effectively reduce drayage costs is to package your freight in the most efficient way possible prior to its ship out. Properly packaged freight often receives a standard drayage rate charge instead of a higher special handling rate.
What You Need to Know About Heavy Weight Transport Rates
When considering drayage and other transportation rates, it’s important to know the details and methods for reducing costs. At Heavy Weight Transport, we can provide you with impactful savings such as drayage and overweight shipping options to increase efficiency.
