Amid COVID-19, it’s more important than ever for shippers across all industries to find innovative ways to achieve transportation cost reduction. And when it comes to cutting costs and creating savings, the team at TransAudit can help. We have outlined our top transportation cost reduction strategies that you can start today to create savings.
Conduct Regular Freight and Parcel Post Audits for Transportation Cost Recovery
As a shipper, it’s likely you spend a substantial amount of money on transportation. Aside from labor costs, transportation management consumes the lion’s share of what it costs to run your business in the modern world. Because of this, it’s only prudent that you implement regular freight and parcel post audits.
In the most simple sense, a freight and parcel post audit is the process of systematically reviewing your freight bills to ensure you have been billed and paid the proper amount. Freight invoice post audits are an extremely tedious and meticulous process where the team at Trans Audit will verify the accuracy of all bills and payment.
The overarching goal is to ensure that any overbillings or overpayments are returned to you, which can supercharge your transportation cost reduction efforts. For example, Trans Audit partnered with a Global 300 multinational electrical and power management company that had more than $15 billion in annual sales.
We filed over $2,000,0000 and recovered a staggering $1,200,000 in a single year. The errors ranged from misapplication of rates, classification errors, discount percentage errors, and a host of other problems.
Negotiate Your Shipping Contracts for Transport Cost Reduction
One way to achieve transportation cost reduction is to negotiate the term of your shipping contract. On one hand, you can use the information from your post audit to enter negotiations in a position of power.
You may be able to negotiate more attractive rates by shipping at off-peak times. This may include shipping freight early in the week or late in the day. A lot of carriers tend to reserve lower rates for shipping during off-peak times to attract shippers who are more cost conscious.
While this was one example of a way you can negotiate your contract, there are a number of different methods and practices you can take to achieve the desired goal: transportation cost reduction. Work with your TransAudit specialist to achieve a more tailored approach.
Consider Shipping Vendor Consolidation to Achieve Transportation Cost Reduction
Along the same lines as negotiating your contracts, consolidating carriers is an excellent way to achieve transportation cost reduction. Consider terminating the contracts you have with low-volume carriers and consolidating operations into a few high-volume, larger partners. This simple step may alleviate you of unfavorable contracts while setting you on the right track toward more attractive terms and rates.
Negotiate Favorable Rates
You can also look to then negotiate more attractive rates with these high-volume carriers. In many instances, locked-in contracts or guaranteed volumes can lead to much more appealing, superior terms.
Pack Smarter to Achieve Transportation Cost Reduction
Although most shippers associate transportation cost reduction only with the carrier, there are several steps you can take well before the carrier gets involved, especially your packaging. And there are an array of steps and best practices you can use to pack smarter.
Work to Maximize Packing Space
Work to maximize packing space and ship as many products as possible in a single box. You can also consider redesigning your packaging to optimize it for space, which has the potential to help you achieve transportation cost reduction.
Don’t Over Package
Another key strategy is to avoid overpackaging. Overpackaging adds bulk to your shipment, which can lead to higher transportation costs, creation of large amounts of unnecessary waste, and increased overall costs.
Although protecting your product should always come first, it’s often not necessary to use layers upon layers of packaging. In the end, the goal is to safely ship your products while making the most out of the space.
Partner with TransAudit for Cost Reduction
At TransAudit, we specialize in cost optimization and reduction. By utilizing our vast cross-industry and transportation knowledge, we will work closely with you to identify and present tactical cost reduction opportunities.
Our cost optimization and reduction solutions are a component of our proprietary post-audit process. We will provide contractual as well as transportation specific improvement recommendations that span across an array of areas, including:
- Fuel surcharge reduction
- Claim filing statute improvements
- Improved shipping rates
- Improved shipper contractual rights
- Un-contracted lanes
- Identification of rogue carriers
- Least cost carrier
- Cost avoidances
- Removal/reduction of currency adjustment fees
- Removal/reduction of various accessorial charges
- Removal/reduction of peak season surcharges
- And more
Contact Trans Audit Today for Transportation Cost Reduction and Cost Recovery Services
Implementing and maintaining a freight bill audit program is significantly less expensive and more beneficial than you realize. At TransAudit, our state-of-the-art solution is simple, swift, straightforward and requires minimal involvement from you and your team. Instead, we will work directly with your providers, carriers, and internal staff to facilitate a streamlined implementation.
We will establish an automated recurring feed of all of your freight bills. Then, we will automatically monitor freight bills, identify errors or overpayments, and work with the carrier to generate your refund.
Backed by our unsurpassed proprietary cloud-based claims analytics system, TransPortal, you can easily analyze and view claims activity online. TransPortal is updated daily allowing you to see claims aging, claims status, error types, claim distribution by carrier and mode, as well as other key information.
Contact Trans Audit today to learn how we can help.