The 2:00 Minute Warning

Over the last couple of months, I’ve been speaking at conferences and contributing to publications around the topic of how shippers can lower their LTL freight costs through strategic LTL bid management.

That has led to calls from people asking, “How do you actually lower costs when my carriers are issuing and expecting to get their general rate increases? They’re not talking about decreases.”

Thankfully, we know from our vast experience and having conducted billions of dollars in LTL and truckload sourcing events, that there are things that shippers can do that will actually result in lower LTL rates. We can apply a proprietary multi-carrier RFP execution process on your behalf to secure competitive results.

That process is based on a couple of steps.

First, benchmark your rates so you know where you’re at relative to the market.

This first step will give you a clearer view of whether savings are possible by leveraging freight spend benchmarking for sourcing. The market is constantly changing so new opportunities could be available.

Second, look at your carrier networks to identify where to route your freight.

Instead of using the traditional sourcing model that a lot of companies use where you leverage purchasing power by using as few carriers as possible, before you invite carriers to bid, evaluate where the carriers actually want to run their trucks.

When you give carriers freight in their preferred high-density lanes you get better rates. When you demand that carriers run in non-preferred lanes in order to get your freight, their ORs rise and so do your rates. A carrier bid strategy that plays to the carriers’ strengths results in better rates.

Third, find out what your current carriers think about your business as part of a structured LTL procurement cycle.

Do you know what the cost to serve your company looks like? How can you find that out?

TranzAct’s Carrier Yield Test has proven to be a valuable tool for shippers who want input from their carriers on what it takes to manage their business. In essence, shippers turn the tables and ask the carriers to give them a report card about their business. This input can be very valuable in collaborating with carriers in addressing issues like dock performance at your customers and supplier docks and facilitating a more data-driven carrier selection process.

Fourth, pay attention to the freight markets and listen to what the carriers are saying.

In addition to learning what LTL and truckload carriers say about your company specifically, pay attention to the broader trends in the freight markets.

Fortunately, following the freight markets is easier than shippers think. There’s a lot that’s being communicated through outlets like conferences, the financial analyst calls, and freight publications such as the Journal of Commerce, Logistics Management, or Talking Logistics. At TranzAct we are proud of the webcasts we host with great groups like the National Industrial Transportation League and CSCMP, and the podcasts we conduct with C-Level executives from prominent transportation carriers.

For example, on a past webinar Pitt Ohio’s Geoff Muessig shared a valuable guide to six items for best-in-class pricing and capacity. And in our interview last year with Rob Estes, he shared valuable insights into how LTL carriers are approaching the market.

Looking for help?

Overwhelmed by the prospect of getting to know the market and how you can collaborate more effectively with your carriers?

We know this is no easy task and that’s why we’re here to walk you through this and do the heavy lifting ourselves.

We encourage you to contact us to benchmark your rates and learn how our end-to-end LTL sourcing methodology can uncover substantial savings. Or start off by taking advantage of that TranzAct LTL assessment process where we walk you through all the steps that you can use to lower your freight costs.

If you’re interested in learning more about how that assessment can generate savings for you or anything else, send us an email, give us a call, or schedule a time to meet with Calendly.