There’s a lot to follow in the transportation and supply chain space right now. One item at the top of the list for many shippers is tariffs. We've been hearing the question, "How will tariffs affect our supply chain and freight costs?” Right now it’s too soon to tell. Since tariffs can be used as a bargaining tool, the size or magnitude of many tariffs or how they might be applied will likely hinge on the outcomes of discussions ahead. Stay tuned for more as this develops.
We also want to respond to those who have reached out about the LTL webcast we did earlier this month. Thanks to our panelists and lots of engagement, it was a grand slam! If you haven’t listened to it, you can still find the recording here.
The panelists all agreed that the changes in the classification system are the biggest ones we have seen since deregulation in 1980. That is why the the changes they’re making to the NMFC is such a hot topic. Make no mistake about it, this could have a significant impact on your freight costs.
Although shippers should expect to see rate increases as a result, that doesn’t mean your overall LTL costs have to rise! We like to remind shippers that basically, they have two choices. If a shipper sits back and chooses not to do anything, it wouldn’t be a surprise, according to a lot of experts, to see their LTL costs go up by 10-15% in the next year due to the combination of the GRIs and the proposed changes to the classification system.
The second option is to be proactive in looking at things they can do to protect and even reduce their freight costs. We recommend the second option which is why we are committed to providing expert advice like that which was shared on the webcast. TranzAct has a great track record for helping companies design and implement strategies for proactive shippers. For example, even with rates rising, we've been sharing three things companies can do to reduce their freight costs by as as much as 5-10%. That’s a 15-25% difference for companies who are committed to reducing costs and bringing savings to their bottom line.
And that’s why people have been asking questions like:
• What are the key principles to reducing LTL costs?
• What should I do about the density of my shipments?
• How do I improve my relationships with my carriers?
• And what are other strategic changes I can make?
If you’re wondering where to get started on the journey to reducing costs and saving money, we’re here to help. We can provide a LTL strategic assessment that identifies how your company can reduce LTL shipping costs right now. If you’re interested in learning more, simply give us a call or schedule a time to meet.
One last thing. Over the next couple of months, I’ll be attending and presenting at a lot of conferences. So if you are planning to attend the Stifel conference, the JOC's TPM25 or the RILA Link 25 Conference, let's connect and get together. Simply send me an email and we will make it happen.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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