Everyone is looking at how to lower costs today. It seems each year companies ask their employees to find ways to reduce expenses. After a while it’s hard to find areas to improve. Most of the low hanging fruit is already taken. Here are two areas that you can look at.

Consolidate Your Carriers – If you run a report from your MIS system on freight expenditures you might be surprised by how many carriers are listed, sometimes 50 to 100.  By consolidating the number of carriers, you may increase your profit margin. One approach is to look at your freight by zones and types of shipments and ask a number of carriers to bid on this business. Bring in a few of your carriers and talk to them about what you want to do. Now is a good time to do this as freight carriers are looking for additional business. When you greatly increase the amount of business per carrier you can generally lower your overall cost.

Ancillary Charges – This area is becoming a larger and larger portion of the freight bill and is charged on a per item basis. If you have many inside deliveries, deliveries that require notification, delivery confirmation, etc. the ancillary costs can be as high as the freight charge. This is an item that can be negotiated with the freight carrier, especially if you are consolidating your carriers. Getting those charges on your customer’s bill is another challenge. Sometimes these changes happen just before shipment and are not part of the estimate. Make sure you have a procedure for getting these charges back to your customer’s invoice.