Making the best decision for routing a Truckload or LTL shipment is usually about weighing the cost and service a given carrier can provide. But, having the time and access to capacity to find that balance is rarely easy—especially in today’s market.
Even the tightest delivery deadlines can be met if money is not an issue. Since few companies have the luxury of an unlimited budget, however, it falls back on whoever makes those decisions to optimize the cost of a shipment and how long it’ll take to get there.
Yet while there is no silver bullet to fix these challenges, there are some things you can do to make the best of what the market is giving you. A common thread to helping is having more time. We get it; supply chains are constantly expected to do more with the little time they have (less lead-time, less wait-time, less time-in-transit.) But, an optimized logistics operation isn’t necessarily a Just-In-Time operation.
With the amount of supply chain disruption right now, all this may seem counter-intuitive. But, if it’s important to your company to look for ways to manage shipping costs better and improve service to customers, then time matters.
Here’s why more time and giving yourself the ability to plan a little more in your logistics operations will help you provide better service and lower your shipping costs. The idea is not as crazy as you may think.
Think About What You and Your Carriers Want
When it comes time to cover a load, two perspectives matter—yours and the carrier’s. Your company wants routing options that meet their needs, and carriers want to plan their asset utilization.
Remember, carriers have commitments (including other loads, drivers, and equipment) they need to plan around. If a carrier knows it has a load to pick up in Chicago on Thursday, and you have a load that is due in Chicago that same day, you will get a better rate from that carrier. The point is finding capacity, and lower rates become way easier when carriers have some flexibility. But, with a small pickup and delivery window, that gets all the harder for obvious reasons.
Fine, But Where Does This Extra Time Come From?
Many companies are unaware of the cost impact that too little planning time in their logistics operation has on the bottom line. So, it’s incumbent on logistics and supply chain leaders to make sure this is understood. Making adjustments to production planning, for example, should be on the table as a consideration to create more planning time for logistics when all the costs are considered. Similarly, there may be inefficiencies with inventory management and shipping dock operations that need to be addressed, forcing bad routing decisions that come with plenty of other unrecognized costs.
Many shipping departments make the mistake of assuming a delivery due date is always written in stone. It’s surprisingly common that your consignee may not need it by that date. Schedules change, and A LOT of due dates are created arbitrarily or with no consideration of cost or what’s actually needed for several reasons (including the occasional over-promising salesperson.)
No Downside, All Upside
It never hurts for a logistics decision-maker to ask for another day or two to make a delivery if possible, regardless of the reason. Even if you only get a few yeses, the savings will be significant. The worst case is your company will be gathering data on the more costly orders and customer relationships that may need to be addressed for other reasons.
It’s a seller’s market for freight right now, but that does not mean you cannot give carriers a reason to want your freight. The more notice a carrier has, the better they can manage resources. And, when it aligns with what their network needs at the time, the overall costs will be less for all parties.
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Transforming the future of freight, Loadsmart leverages technology to build efficiency around how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. For more information, please visit: https://loadsmart.com.