The preliminary Q2 numbers are in and your boss is on your case, “we need to save more money on transportation costs!” We get it, not every budget has room for overnight express air freight – and that’s okay. There are many simple and actionable techniques to save your company money…starting with your next international shipping move. So grab a pen and paper, take some notes, and get ready to look like a supply chain guru when your boss gets the next round of figures from accounting!
1. Schedule delivery to coincide with least expensive shipping options
By establishing a required delivery date that allows time to ship via ocean freight, versus air freight, you can keep your transportation costs reasonable. When shippers send their goods through the air, they will often pay a premium for the speedy service. Lower your transportation costs by planning your moves in advance and take advantage of competitive ocean freight rates.
2. Choose foreign suppliers carefully
Ex Works Costs (EWC) is a fundamental piece of all International freight shipping. The term refers to the price by which a seller – the supplier or manufacturer – makes goods available to the buyer, and the costs associated with this act. These costs can become complicated when duty rates and fees are applied. For example, the Ex Works Cost from a more distant part of the globe may be the least expensive. But when transportation and customs duty rates are added to the equation, the closer supplier with a higher Ex Works price is actually the better deal. Understanding EWC can be a headache for shippers. The Approved Freight International Team has years of experience developing supply chain solutions. Schedule a free consultation with one of our experts and we’ll help you get the best deal.
3. Find a forwarder who treats you as a partner and not a commodity
As we’ve written before, the lowest quoted price may not result in the lowest spending. If you find a forwarder who quotes a low, bare-bones price but does not explain all of the costs involved in shipping you may find yourself with a higher bill than anticipated. The relationship between a shipper and a forwarder should be collaborative. Proper screening and investigation of your prospective partners will result in a better overall experience.
4. Minimize product footprint
Efficient packaging can cut down on the amount space and weight a product occupies on an aircraft or in a steamship container. For transportation companies, space is the most valuable commodity. When you reduce your packaging down to the bare minimum it will take up less space, and give you the best price available for your goods. There are still some basic requirements and best practices for securing your product for shipment, but a good product and thoughtful package design can help your supply chain reach its most efficient state.
Additionally, less packaging is much better for the environment. It will require less material and eliminate waste. You can pay less and feel good about reducing your company’s impact on the ecosystem; a true win-win.
5. Consider a 4PL
If you find that a majority of your sales occur on the opposite coast of where you are located, it may be time to partner with a 4PL. A 4PL can assist with every phase of your goods’ journey. From overseas transportation to warehousing and fulfillment through to final delivery a great logistics provider will be there to help. Their volume will reduce your overall cost and help ensure your product arrives at its destination every time.
So there you have it, a quick and easy way to reduce your overall transportation spend. This list is far from exhaustive, and our team of International Freight Expertshave a long list of tips and tricks to share. If you have a specific question, want to run some ideas through their skilled brains, or need to revitalize your supply chain – schedule a free consultation here. Just 5 minutes of your time and we’ll get you on the right path forward.
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