Discount Freight Services

Freight is often one of the top expenses for businesses of all types and sizes. In the world of logistics and shipping, finding ways to reduce costs without compromising on service quality can be tough. However, by leveraging discount freight services, companies can achieve significant savings. So what are discount freight services and how do they differ from standard freight services? In this guide, we'll delve into what discount freight services are and uncover opportunities where your business can save on freight.

What Are Discount Freight Services?

Discount freight services are shipping options that offer reduced rates compared to standard freight services. These discounts are achieved through various means, but are oftentimes arbitraged by intermediaries before any of the savings can make their way to the freight buyer. In fact, some freight brokers have specialized tools in place to identify these inefficiencies in the spot market.

Six Ways To Save

1. Bulk Shipping Discounts: Providers offer lower rates for larger volumes of shipments. Shipping in bulk can significantly reduce the cost per unit, making it a cost-effective option for businesses that can consolidate their shipments.
2. Shared Truckload: Combining multiple smaller shipments into one multi-stop, partial or truckload shipment can optimize space and reduce costs. This method ensures that trucks are fully utilized, which can lead to substantial savings.
3. Off-Peak Shipping: Taking advantage of lower rates during non-peak times can result in significant discounts. By scheduling shipments during periods of lower demand, businesses can secure better rates from carriers.
4. Mode Conversion: Converting a truckload into a rail shipment when shipments are not time-sensitive can offer considerable savings. Rail transport is often cheaper than road transport, especially for long-distance shipments.
5. Trailer Conversion: Converting a shipment from a trailer type that has tight capacity in a given lane to another trailer type with more capacity can help avoid premium charges and find better rates.
6. Redirection: Stitching two shipments together by finding a separate shipment to load from the area of the delivery of the first shipment so as to change the final destination to a more favorable position.

Let's go into some detail on each of these:

Bulk Shipping Discounts

Shipping in bulk can drastically reduce per-unit shipping costs. Providers often offer significant discounts for larger volumes, making it a viable option for businesses that can consolidate multiple shipments. This strategy not only saves money but also simplifies logistics by reducing the number of individual shipments to manage. For example, a company shipping large quantities of products monthly could negotiate a bulk rate that significantly lowers their overall shipping costs.

Shared Truckload

By combining multiple smaller shipments into a single, larger shipment, businesses can take advantage of shared or partial truckload rates. This method helps to ensure that trucks are fully loaded, which can reduce overall shipping costs. It's especially beneficial for companies that frequently ship smaller quantities of goods. For example, a business that has several small shipments going to different locations can consolidate these into a single truckload with multiple stops, thus optimizing the use of space and reducing the per-unit cost.

Off-Peak Shipping

Shipping during off-peak times can yield substantial savings. Carriers offer lower rates during periods of low demand to attract more business. If it is possible to plan shipments during these times, businesses can take advantage of these reduced rates and lower their shipping costs. For instance, a business might schedule non-urgent shipments for late evenings or weekends when carrier rates are typically lower, resulting in significant cost savings.

Mode Conversion

Converting truckload shipments to rail can offer significant savings, especially for long-distance hauls. Rail transport is generally more cost-effective than road transport and can be an excellent option for non-time-sensitive shipments. This strategy allows businesses to benefit from lower transportation costs while still ensuring timely deliveries. For example, a company shipping products cross-country might switch from truck to rail for a portion of the journey, reducing costs while maintaining reliable delivery schedules.

Trailer Conversion

When there is tight capacity in a specific trailer type within a given lane, switching to a different trailer type with more capacity can help secure better rates. When possible, this flexibility allows businesses to avoid premium charges associated with high-demand trailer types and find more cost-effective shipping options. As an example, we once had a deluge of flatbed shipments from Texas from a major producer of OSB (Oriented Strand Board). It came at a time when there was very little flatbed availability in that lane. Dry vans were available in abundance, and the truckload rate in that lane for a van was one-third that of the flatbed rate. With many shipments ready to go, the solution was to simply load vans with two fewer units to each load (we could put 18 on a flatbed and 16 on a van). Thus, we made one extra load for every eight van loads which more than paid for itself at one-third the line haul rate and enabled fast and reliable services while passing thousands in savings along to the customer.

Redirection

Redirection involves attaching a separate shipment to the tail of the original shipment to create a more favorable delivery route. One good example is freight originating from Texas and headed toward California, where the demand for these shipments among carriers is fairly high and consistent. However, delivering to Phoenix, AZ, for example, is less favorable. The market for outbound freight from Phoenix is tighter, and not nearly as many trucking companies are based there compared to Southern California, particularly along the coast. For instance, consider a shipment that needs to go from Dallas, TX, to Phoenix, AZ. By finding a load from Phoenix, AZ, to Los Angeles, CA, you can package this together as a 'Dallas to Los Angeles Two Stopper.' This method not only reduces the cost but also ensures the truck is fully utilized, optimizing the entire shipping process.

Conclusion

Discount freight services provide numerous opportunities for businesses to reduce shipping costs without compromising on service quality. By exploring options such as bulk shipping discounts, partial truckload conversions, off-peak shipping, mode conversions, trailer conversions, and redirection, companies can optimize their logistics and achieve significant savings. Leveraging these strategies can help your business stay competitive and improve its bottom line.

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For personalized assistance with your freight transportation, Get a quote today, call 877-345-3838, or email support@freightsidekick.com.