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6 Tips on How to Lower Your Annual Freight Costs

Posted on Tuesday, July 8th by Pallet2ship logo

According to the European Union, 2013's auto sales were the lowest of many years, a statement confirmed by Renault's 13% sales drop from May 2012 to May 2013. This situation also reflected negatively on the sales of paints, steel and electronics, among others, as well as on the suppliers of the respective industries. Thus, the business volume was reduced significantly and therefore, the shipping and logistics areas were affected too. Such situations raise quite some challenges, so proper money management is essential.

Here are six tips on how to make the most of the shipping space available so as to spend as little money on shipping as possible:

1. Ship in bulk.

Check out whether you can repack the cargo so that it occupies less space. This way, more of it will fit in a 40' container. Also, should you ship the same type of cargo regularly, check out the way in which the goods are positioned inside the container and whether you need to change your packing plan in order for more of them to fit in.

2. Adjust your cargo to the shipping container.

There is no standard size. Heavy cargo fits best in 20' containers, whereas measure cargo fits best in 40' ones. The choice of the container is very important. However, keep in mind that the carrier's best choice may differ from the shipper's.

3. Fit both weight and measure goods in a container.

Weight goods are less bulky. Therefore, you might be able to fit the weight goods in a 20' container and the measure ones together in three or four 40' containers.

4. Check the number and destinations of the containers you ship every month, semester and year and then contact your carrier.

Thus, they can plan their equipment and adjust their price for your convenience.

5. Link your fuel related overcharges to the Brent Crude exchange or other oil-indexed ones.

You can withdraw the overcharge in case of an oil price drop.

6. Check the backhaul rates.

The freight rates and prices per container calculated for shipping over the major freight routes, which are China-N Europe Inbound and China-North America Inbound, may be overloaded. This is advantageous for shippers transporting large cargo volumes, but also for those aiming for better market shares in Asia. Look into the best outbound rates along with your carrier and use them to enter new markets or improve your margin in the ones you are already operating on. A few years back, shipping large-volume cargo in 20' containers from Long Beach to China cost $100 per container.

Saving money is not difficult, but in order to save real money, you have to be efficient. Big shippers can afford to lower their prices by 20-25 euros per container. However, you should be looking to improve your packing plan and reduce the number of containers you ship every year by 15%. You will definitely save money in the long run this way.

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