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October 26, 2012
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Now Is The Time To Lock In Lower Rates On Local Freight Costs


How to Reduce Freight CostsLocal freight trucking is irrevocably linked to the ebb and flow of the larger economy. For the past five years, manufacturing orders have been sluggish at best, causing a chain reaction within the local freight industry. Some of the pitfalls that affect shipping vendors are the constant fluctuations in diesel fuel prices and surcharges. When fuel prices rise, this can be perilous for a smaller freight company that doesn’t have enough day-to-day business. According to recent statistics, around 87% of shippers are small operators. When there is reduced demand for their services, some of these vendors will go out of business. However, those companies who are capable of keeping customer service standards high while running lean operations are in a better position to weather this recession. 

Manufacturing companies would be smart to look into securing as many freight cost savings as possible right now. The economy is slowly beginning to recover. Experts predict steady growth in retail spending between now and 2017of about two percent. Manufacturing of goods is going to pick up and with that rates for shipping locally will also increase. Just like in any other business sector, carriers must seek out new customers while retaining their existing ones. This means that many freight operators will be willing to negotiate more favorable terms on contracts in order to either win a new account, or keep an existing client from bolting to one of their competitors. 

Now is a good time to seek out the professional advice of an experienced freight consultant. Freight consulting involves analysis of current local carrier contracts, proposals and negotiations to find the best deal for obtaining low freight costs. Many procurement managers would like to get a handle on this expensive part of the budget, but lack specific knowledge when it comes to sitting down and going over the contracts with a fine-tooth comb. Meanwhile, a consultant familiar with the process can quickly provide good data on how much money is being currently wasted in this area. Even if a company chooses to stick with the same trucking firm, there are still opportunities to renegotiate for lower rates over the long-term. 

Once business picks up again for local freight trucking companies they’ll be inclined to skew the rates heavily in their favor. Therefore, the best time for obtaining a great discount on moving goods to and from local destinations is now. You can gain the upper hand by having any carrier proposal analyzed for hidden cost savings. This is a win-win situation for the vendor too as they will have an opportunity to continue servicing your business into the future.