The following are some examples of areas which can be evaluated:
What is the amount of discount that you are receiving from the carriers you are now using and is your company actually receiving it? The level of discounts available varies widely, and the carriers billing department may not always give your company the benefit of the reduced freight charges. Does the discount apply on all of your company’s shipments or are there hidden rules which preclude your company from receiving it?
Are your shipments, including inbound shipments from vendors, correctly described to take advantage of the lowest available freight rates? Misclassification of shipments can result in freight charges that are sometimes 50% more than they should be.
Preparation of Shipping Documents
Are you familiar with all the terms and conditions of a bill of lading? A bill of lading is a legally binding contract between a carrier and shipper. Improperly prepared bills of lading can obligate your company to pay excessive freight charges. If your company ships hazardous materials, improperly prepared shipping documents can subject your company to possible fines by the D.O.T.
As an alternative to discounts, many shippers are negotiating reduced "FAK" rates which more accurately reflect the carrier’s costs of transporting their products. Factors such as density, packaging, loading characteristics, and susceptibility to loss and damage affect a carrier’s costs. A thorough knowledge of how these factors affect carrier costs can be a valuable asset in conducting effective negotiations to obtain reduced rates.
Carrier Evaluation and Selection
Does your company have a close working relationship with several reliable carriers or does your shipping department use a different carrier every week? Because of less government regulation, there are many unreliable and inadequately insured carriers seeking your business.
Small Shipment and Air Express Service
Does your shipping department use the most cost-effective combination of Express Mail, United Parcel Service and Air Express for small shipments? Do your air freight shipments really have to be there the next day or will two-day service suffice? Many times shippers specify next day delivery for shipments made on Friday, forgetting that delivery is usually impossible until Monday.
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LAST UPDATED March 04, 2000