What practices will keep your freight forwarding services competitive despite growing competition?
Two trends are moving in the freight forwarding market right now: Growing competition is forcing prices down and at the same time operating a truck is becoming more and more expansive. As these two forces close in on shippers in the UK like Scylla and Charybdis, there are a few strategies which could give your company the edge over the competition just when you need it most.
If you could raise prices without losing business, you would already have done so.
With that in mind, let’s explore ways to reduce your costs and preserve your margins in a time of falling prices.
First, look at your procurement and sales practices. Many companies are harbouring inefficiencies here which could be resolved to reduce costs. Perhaps you have already jumped on the ‘lean practices’ bandwagon, and made an effort to minimise your inventory. You may have noticed that going too far in that direction has actually increased your costs. Small, frequent shipments and high inventory turnover can reduce some warehousing costs, but can also mean running with half-empty trucks and spending more than you can afford on the actual shipping. You need to balance this carefully to maintain profitability. Click here for a free freight forwarding quote.
Second, look at your carrier bidding process. Using the ‘core carrier’ strategy has advantages, but again following it too slavishly can increase your costs. If you using a chosen carrier for freight that fits their network poorly, the price can be crippling. Better than ‘core carrier’, look at ‘right carrier’ strategies that chose carriers based on their capabilities with the different types of freight you ship.
For international shippers who do anything with LTL bids, look closely at whether a base tariff or a customised tariff is right for you. Often times just choosing the base tariff can cost a lot of money. Research this carefully, and don’t be afraid to negotiate.