5 Ways to Decrease Your Shipping Operation Costs

AUSTIN, Texas - Oct. 18, 2018 - PRLog -- In a world where customers are expecting faster (and often free) delivery, businesses are finding it more important than ever to closely manage their ground shipping operations. We take a look at how to address the twin challenges of reducing delivery times while decreasing shipping costs.

We'd now like to introduce you to Matt Rundblad, who oversees our Formaspace Customer Service and Shipping Operations. Matt started his career in shipping and receiving at some pretty well-known companies, including Dell, Pepsi, and Thermofisher. He's been with Formaspace for five years now and can speak with authority on what he's been able to accomplish to reduce Formaspace's shipping costs.

We asked Matt to give his advice on some of the ways you can make your ground shipping operations more efficient and cut down on your freight shipping costs.

1. BEFORE YOU START: ANALYZE YOUR GROUND SHIPPING OPERATIONS REQUIREMENTS

In this first step, you need to act with conviction. Pretend that you know nothing about the business and start asking yourself questions that challenge all your existing assumptions.

Why should you try this? The resulting, creative insights that come from questioning your standard operations might end up saving your company a lot of money. For example, if you have a product that is due for a redesign, could it be an inch narrower next time, which in turn, would allow more of the finished product to fit on a single shipping pallet?

What about weight savings? Could you switch to different materials or choose a lightweight composite design that would result in significantly lower shipping costs?

Do you have too many incidents where your products are being damaged during shipment? If so, look at reinforcing the product itself or changing the shipping container design to help protect it during transit.

These types of value, engineering investigations could provide substantial shipping cost savings throughout the entire product lifespan.

Next, you can look at your primary shipping patterns. Identify the major city pair shipping routes you use most. As we'll see in a step further down the list, knowing your customer sales projections and freight shipping requirements for the next year or two can give you a much stronger hand when negotiating lower freight company shipping rates for your higher volume routes.

Finally, look at your customer's requirements. If you are shipping to a company that has fixed receiving hours (such as a retail company), there may be hefty penalties if your delivery misses the delivery window requirements. In some case, the penalties can be as high as 3% of the PO, which can add up quickly. In these cases, it might make sense to pay a bit more to avoid penalties by shipping via an expedited service that guarantees on-time delivery, especially during bad weather or the holiday shipping season.

2. CREATE EFFICIENT SHIPPING OPERATIONS WITH THE RIGHT PACKING TABLES AND SHIPPING STATION CONFIGURATIONS

When you are looking at the requirements for your shipping operations, don't overlook how your packing tables and shipping stations are configured.

As we described in our article 10 Speedy Shipping Stations Set Up Tips (https://formaspace.com/articles/material-handling/10-spee...), you'll save money and time if you order fulfillment process is organized to avoid any unnecessary bottlenecks.

Packing and shipping personnel will make fewer errors if they have a clean, organized space to work — with the necessary packing supplies and equipment positioned in an easy-to-reach layout configuration.

Talk to your Formaspace Design Consultant about how you can improve the accuracy and throughput of your packing tables and shipping stations. We can also provide a Rapid Plant Assessment (https://formaspace.com/articles/industrial-furniture/tell...)  that takes a look at all aspects of your facility's overall production layout and flow.

Whether you are a small company or a major enterprise, we have the experience to help you design a more efficient facility. Not convinced? Just ask one of our many industrial companies, including Kuene + Nagel, Amazon, Dell, Eli Lilly, Ford, Medtronic, and Toyota who have chosen Formaspace for their industrial furniture needs. (https://formaspace.com/industrial-workbenches/)

3. UNDERSTANDING HOW FREIGHT CATEGORIES AND RATE STRUCTURES AFFECT YOUR SHIPPING COSTS

As you are probably aware, ground transportation is generally divided into two categories:

"Truckload," as the name implies, is a full truckload of freight, usually loaded with 24 or more pallets, weighing up to 45,000 pounds (or more). A typical truckload shipment travels from your shipping dock directly to the customer without intermediate stops.

"LTL" stands for "less-than-truckload" freight, e.g. a partial shipment that's typically between 1 and 6 palettes. With LTL, it's likely your freight may have to be loaded and unloaded (known as 'touched') at one or more transfer terminals on the way to your customer delivery.

Truckload and LTL shipping rates and freight categories are different as well.


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