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The condition of the economy has a significant impact on most companies, especially concerning their freight shipping operations. In particular, the freight logistics process is susceptible to several factors, including a recession.
Freight logistics is the process of overseeing and managing the delivery of freight shipments. The goal is to ensure that goods have a smooth and safe journey from the origin to the destination.
A recession, or a downturn in economic activity, can decrease the demand for goods, shift negotiation power, and present various other challenges for any company. If you are responsible for freight logistics at your company, you’ll need to optimize your process to avoid the worst effects of a recession. How do you go about this? Cargo Express Freight has shared an insightful guide to help you get started. Keep reading to learn more.
Assessing Your Current Freight Logistics Process
Before you make changes, you first need to evaluate your current freight logistics process. With your findings, you can make more informed choices for your business operations.
Evaluate Transportation Modes and Carriers
How well are you using less than truckload (LTL) freight shipping? Are your products being transported on land, over water, or via air? What kind of transportation services is your company currently using? What freight shipping companies are your transportation partners?
Compiling all this information together will create an easy report to reference when making necessary changes.
Analyze Freight Shipping Costs
Your freight shipping cost is highly susceptible to various factors, such as the distance your goods travel, how heavy the LTL shipments are, what freight class your shipments are traveling under, how often you send full truckload (FTL) shipments, what kind of carriers you’re working with, and so on. Knowing your exact freight costs gives you an idea of how much you’re spending, with the amount serving as a metric that you can later adjust as you adapt to a recession.
Identify Areas of Inefficiency
The final aspect of assessing your freight logistics process is identifying areas of improvement. Evaluating your current transportation modes and carriers will give you valuable insight into where most of your shipping budget is spent and whether you can better utilize resources.Here are some questions you can ask to determine inefficiencies in your operations:
- Are there freight loads being delayed because the shipment details are entered incorrectly?
- Are you spending too much due to incorrect freight classification?
- Do your shipping freight routes take too long?
- Are there too many extra processes or auxiliary charges that result in overly long or expensive shipments?
- Are there extra services you could be skipping to get a lower price?
Tips for Optimizing Freight Logistics Ahead of a Recession
Build Relationships With Carriers
Carriers are an important part of the supply chain, so it’s imperative to build a good rapport with the company you chose. During a recession, you can leverage your partnership to negotiate more competitive pricing or lower freight rates. They’re also more likely to provide streamlined services given their relationship with you.
Consolidate Shipments
To reduce LTL shipment costs, you can consolidate multiple shipments into a single one whenever possible. Not only does this practice decrease shipping expenses, but it also lowers your employees workloads.
Improve Freight Packaging and Handling
If you want to decrease delays, increase customer satisfaction, and lower freight shipping costs, you should improve your packaging and handling practices. By improving your freight packaging and handling practices, you can help prevent damage to your freight during transportation and reduce the risk of unexpected costs. You can do this by:
- Using sturdy packaging materials to protect your freight during transportation
- Securing your freight properly to prevent damage
- Labeling your freight clearly to make sure it goes to the right place
- Training your employees in proper packaging and handling techniques
- Using experienced carriers like Cargo Express Freight
Optimize Routes and Delivery Schedules
By planning your routes and schedules more efficiently, you can reduce transit times, improve on-time delivery rates, and lower your transportation costs. You can also invest in software and other services that help you find the best routes and delivery schedules. Not only will these programs make your operations more streamlined, but they also save time and allow you to combine several shipments in a common route.
Negotiate Rates and Contracts
FTL and LTL freight rates can fluctuate because of fuel surcharges, lack of manpower, supply chain disruptions, and other issues stemming from a recession. A smart shipping manager or logistics director should know how to negotiate the freight rate or contract to secure the lowest price.
Use Freight Auditing and Payment Services
Freight auditing and payment software can help you accurately assess your freight bills. From these findings, you’ll know what areas you can adjust, where to reduce expenditure, and where to focus your budget before a recession hits. Cargo Express Freight offers free invoice auditing to make sure you aren’t being taken advantage of.
Contact Cargo Express Freight for Complete Freight Shipping Services
If you’re looking to optimize your freight logistics process and improve your shipping services, contact Cargo Express Freight today. As a trusted company with a long-standing reputation for excellence, we work hard to provide “outside-the-box” cost-effective shipping solutions to our customers. Reach out to discover our complete range of freight shipping services, including full truckload, less than truckload, air freight, ocean freight, and intermodal transportation.
