Bargain hunting isn’t a new concept to the world of consumerism. Anyone who grew up with grandparents or parents born in the early half of the 20th century know the lengths a buyer will go to get a better deal. Heck, even millennials are carrying on the tradition with coupon apps and websites. That’s because a great deal is – well – great. There’s no better feeling than finding the perfect match at an excellent price. Discounting works well for purveyors of goods, but what of service companies? Supply chain management is a complex network of assets, partners, and bottom lines. Without the proper planning and work upfront, it can be challenging to find a provider who can deliver (pun entirely intended) at a rate which fits your budget.
Below, we’ll take a look at what we think makes a great rate, where to look, and how to secure the best ocean freight rates for every shipment.
Here’s what makes a great rate
When working with a great 3PL partner, a lot of time and effort will be spent analyzing data. For Approved Freight, a perfect rate is a price which guarantees your goods will arrive safely at their final destination. This definition might seem overly simple, but we see many providers ensuring a level of service that is impossible at dirt cheap rates. As we mentioned in our previous article, the lowest price isn’t always the best deal. A rock-bottom price means less money for training, equipment, facility maintenance, and safety measures which protect your precious cargo. By reducing losses, finding a reasonable rate with an excellent asset-based 3Pl will increase your revenue.
Here’s where to look
Start with the ones you know. Begin with your current freight providers or the list of companies with whom you usually move your freight. Ideally, target companies that have assets in or near your final destination. For instance, if you are shipping to Hawaii, find an asset-based freight forwarder to manage your supply chain. When your provider controls its costs, you are likely to experience better service at a lower price.
If your provider is using agents and is outsourcing most or all of the shipping process, then your prices will inevitably rise. Increased costs at a fraction of the quality is a surefire way to destroy your bottom line.
Here’s how to secure the best deal
Give them your data.
Every day we see companies unwilling to share their shipment data. We understand the reluctance to fork over years of company history, but the benefits of doing so far exceed the risk. When a freight provider can see the trends and facts of your organization, they will be able to customize your rates to suit your needs better. Far too often we see companies looking to make a switch because their current providers aren’t fulfilling all of their shipping needs. Find a company willing to take their time and energy on analyzing your data. It’s a precious tool and increases your chance of success. If you are still on the fence about passing along your data, ask for an NDA between you and the 3PL provider. It will give you peace of mind and allow them to assess the best shipping solution thoroughly.
Be willing to change.
We get it – changing a longstanding workflow is painful to stomach for most companies. However, if you aren’t improving your processes to compensate for shifts in the market your business is all but doomed. Stagnation is a severe threat to even the most stable companies. So if your prospective logistics partner proposes an overhaul of your supply chain, you need to be willing to change. Ask for case studies, quarterly business reviews, and consistent monitoring of the project’s success. Steady evaluation gives you better insight into the effectiveness of your deal.
Try to lock in long-term rates with a provider.
We’ve explored why spot quotes don’t work for every business before on Forward with Approved. By supplying your potential 3PL with accurate information on the dimensions, weights, and volumes of your freight, they should be willing to offer long-term prices. When you know your costs up front, each time will allow you to plan your resupply and to restock much more efficiently.
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