Running a business can be a tricky one, especially when it comes to trying to save money and keeping the bottom line flourishing. Often the things that can eat away at the bottom line are essential running costs which often go unnoticed. One of these cost categories is freight costs. Keep reading to learn how freight costs impact on the financial health of the company and what things can be done to reduce them.
Package size affects freight costs
Shipping carriers often charge for package metric volume as well as or in conjunction with weight. When one considers an international flight, weight and size of cargo are both vitally important. To lower freight costs, make sure to investigate the different package dimension and weight combinations to ensure that your package can fit into the smallest possible category as there can often be significant differences in cost between them.
Investigating packaging options
Often it can be cheaper to package your item and print your own labels but this is not always the case. For example, if the packaging materials you have do not facilitate the packing of your item so that it adheres to the regulations of the lowest and cheapest shipping option available, then it could be worth using the carrier’s own materials, which do not have an associated “dimensional fee” attached.
It is not good to put all your eggs in one basket with shipping companies. Investigate the different companies available, the delivery timeframes and insurance options they provide. Not only would this mean you have backup options, but also by utilising several providers with a range of shipping options, your customers can be provided with choice.
It may also be possible to negotiate with different providers for cheaper deals. When comparing transport options, it is also beneficial to enquire if shipping companies can provide discounts for heavy use. If they can and your negotiations are successful, then you may be able to whittle your roster of carriers down and take advantage of significant cost savings by guaranteeing more business for only a few shipping carriers.
Make use of technology
Most carriers provide a tracking service which lodges the location of the package at each change in its journey as it is scanned. This can usually be easily queried on the carrier’s website. However, this involves constantly logging in, refreshing pages and searching for the tracking number.
Investigate the different software options supplied by carriers as often there are systems where printing labels and lodging jobs is a simple one-step process, as is tracking items which can often have alerts sent to an email address or phone number. By being automatically notified of a package’s journey to you or to your customer, time is saved from having to constantly check, and you can accurately predict item arrival time, which assists in inventory management. You are also able to take note of when a package is delivered to a customer to ensure it is timely and optimised, promoting customer satisfaction.
Bill customers after all shipping fees have been factored in
An important part of cutting down on shipping costs is to ensure that all costs and insurances are covered by the customer in the billing structure. One area where companies can slip up is in billing the customer for freight before all the costs have been factored in. This means that any extra costs incurred must be covered by the company, which can significantly add up over time.
Every penny saved is a penny earned as they saying goes, so why waste vital earnings for the sake of not investigating shipping options? Do due diligence in the hunt for the most economical options available as this will result in huge cost savings in the future.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.