The shipping industry is evolving, and so are the strategies to optimize freight costs. Managing costs is crucial for maintaining a healthy bottom line. In this blog post, we’ll delve into some valuable insights and tips based on key principles on how to manage and reduce freight shipping costs.
1. Know Your Transportation Options:
The foundation of effective cost management begins with understanding your shipping options. As US Cargo Link offers a range of logistics solutions, businesses can choose between ocean, air, and ground transportation methods. By aligning your cargo with the most suitable mode, you can unlock potential savings. For instance, ocean shipping, known for its cost-effectiveness, is a prudent choice for international goods. Hence, combining multiple modes can lead to even better results, reducing costs while ensuring timely deliveries.
2. Consolidation for Efficiency:
Consolidation is a strategy that US Cargo Link recognizes as a game-changer. By combining LTL shipments or partnering with nearby companies, you can benefit from shared resources and reduced expenses. This approach not only drives down costs but also enhances transit performance, a win-win scenario.
3. Packaging and Design Optimization:
Much like the importance of smart packaging in logistics, US Cargo Link emphasizes efficient packing. Consider adopting packaging strategies that maximize the use of space, allowing you to ship more products with fewer pallet spaces. Collaborating with carriers to optimize packaging can lead to lower freight costs without compromising product protection.
4. Leverage Relationships and Contract Rates:
US Cargo Link’s advice on building carrier relationships aligns with nurturing partnerships to reduce freight costs. Negotiating attractive rates with high-volume carriers can yield favorable terms and consistent savings. Contracting long-term arrangements not only provides cost certainty but also enables carriers to optimize their operations, resulting in mutual benefits.
5. Strategic Timing and Logistics Planning:
In line with US Cargo Link’s approach to off-peak shipping, effective logistics planning plays a vital role in cost reduction. By analyzing shipping patterns, you can identify optimal times to schedule shipments, taking advantage of lower rates during off-peak periods. Implementing a comprehensive logistics strategy allows you to make informed decisions that lead to enhanced efficiency and cost savings.
6. Embrace Innovation and Outsourcing:
US Cargo Link’s recommendation to outsource freight management resonates with the idea of leveraging technology and expertise. Embracing innovations such as transportation management software (TMS) can streamline operations, optimize rates, and enhance overall efficiency. Outsourcing to experienced logistics partners enables businesses to tap into industry knowledge, driving down costs while maintaining quality service.
In the dynamic world of logistics, cost management is a continuous endeavor. By understanding transportation options, embracing consolidation, optimizing packaging, fostering relationships, strategic planning, and leveraging technology, companies can achieve significant savings while ensuring seamless logistics operations.
In the ever-evolving world of freight shipping, understanding the intricacies of pricing and factors affecting costs is essential for businesses seeking to streamline their supply chain operations and optimize budgets. Let’s delve into the key elements that influence freight rates.
Delivery Speed: During the pandemic, the landscape of delivery expectations has undergone a dramatic transformation. Flexibility and speed are no longer merely desirable. The demand for flexibility and speed isn’t just a convenience—it’s a game-changer that directly influences your freight costs.
Weight, Density, and Freight Class: The weight and density of shipments significantly impact freight class, which, in turn, affects costs. Employing lightweight yet durable packaging and partnering with efficient shippers can lead to better rates. The larger the package, the higher the freight class, and the more it’ll cost.
Distance and Geographic Optimization: Geography plays a pivotal role in freight costs, with longer distances generally translating to higher expenses. The key lies in strategic geographic optimization, which involves setting up fulfillment centers strategically, reducing outlying deliveries, and maximizing truck capacity.
Seasonal Trends: The ebb and flow of seasonal demands directly influence freight rates. Accurate forecasting, based on historical trends, mitigates budgetary challenges during periods of heightened demand.
Disruptions: Supply chain disruptions have become a norm, necessitating proactive strategies to manage unforeseen challenges. By devising robust contingency plans, you can navigate disruptions and their subsequent impact on freight costs.
Fuel Costs and Freight Demand: Fuel costs and fluctuating demand directly influence shipping rates. Awareness of regional fuel costs and fluctuations empowers you to anticipate variations in shipping expenses. Monitoring supply and demand trends enables you to leverage favorable market conditions to your advantage.
Accessorial Charges: Accessorial charges can significantly impact freight costs. Being well-informed about potential accessorial charges, such as lift gates and special deliveries, enables you to accurately budget and avoid unforeseen expenses.
By integrating these insights into your freight shipping strategy, you can navigate the complex landscape of freight rates with confidence. Remember, a well-informed approach, proactive planning, and strategic partnerships are the keys to optimizing costs while ensuring efficient and reliable deliveries.
For expert guidance and support in mastering freight shipping, connect with us at US Cargo Link.
In today’s fast-paced business world, logistics management stands as a critical and complex aspect of supply chain operations. Companies must continuously adapt to ever-changing demands and challenges to ensure the efficient movement of goods from manufacturers to consumers. Here are 5 key elements that ensure smooth logistics activities:
Logistics planning serves as the backbone of a smooth supply chain operation. The fluctuating nature of supply and demand in the market requires constant coordination and organization. Warehouses and storage units act as crucial components to maintain a steady supply of goods. Proper logistics planning ensures timely delivery and effective handling of products, contributing to a healthy supply chain.
Packaging/unitization plays a pivotal role in preserving product quality and ensuring safe transport. The design, materials, and branding of packaging are carefully strategized to create a positive consumer experience. Unitization assists in optimizing storage and transportation by bundling goods into easily transportable shapes. The goal is to fit products into a cuboid shape, which helps streamline the logistics process.
3. Inventory Control:
Inventory management is a vital element in logistics management, playing a critical role in controlling the flow of goods and products going in and out of warehouses. It involves predicting consumer demand by analyzing sales data and utilizing statistical tools to ensure optimal inventory levels. Effective inventory management enables businesses to avoid stockouts and oversupply. A well-managed inventory system enables businesses to optimize their supply chain and maintain healthy profit margins.
Transportation is a major cost driver in logistics management, making it essential to find fast and cost-effective methods for product delivery. Different products require various transportation modes, ranging from road vehicles to air transport. In the era of e-commerce, customers expect rapid and reliable deliveries, underscoring the need for transparent and efficient transportation services.
5. Information Management:
Data-driven logistics is the future of the industry. Effective IT management systems throughout the supply chain enable businesses to enhance efficiency, reduce errors, and meet customer demands accurately. From inventory flow, procurement or auditing to warehouses and transportation, data analysis supports strategic decision-making and helps achieve business goals.
The ever-evolving landscape of supply chain management demands a comprehensive understanding of logistics management. By focusing on the critical components of planning, packaging, inventory control, transportation, and information management, businesses can build a strong foundation for efficient supply chain operations. A well-executed logistics strategy empowers companies to stay ahead of the curve, reduce costs, and deliver exceptional customer satisfaction, all essential elements for sustainable success in the dynamic world of modern business.
Ready to optimize your supply chain and streamline your logistics operations? Choose US Cargo Link! Partner with us and get seamless, cost-effective, and customized solutions for all your logistics needs. Contact us today and let’s unlock the full potential of your supply chain together.
In today’s fast-paced business world, effective supply chain management is essential for success. The complexity of logistics increases tremendously as businesses grow and enter new markets. This is where Third-Party Logistics (3PL) providers come in, offering expertise, resources, and efficiency to streamline the supply chain process. Based on a recent survey conducted in 2022 with over 300 participants from the shipping industry, 86% of shippers acknowledged the cost-effective benefits of collaborating with a Third-Party Logistics (3PL) provider for their logistics needs. In this article, we will explore the benefits of 3PL and provide insights on how to choose the right 3PL partner for your company.
Understanding 3PL and its Advantages:
Third-Party Logistics, or 3PL providers offer outsourced logistics services, including transportation, warehousing, inventory management, order fulfillment, and more.
There are many benefits that come with 3PL services. Firstly, it allows companies to focus on their core competencies by offloading non-core activities to experts. 3PL organizations are experts and can impart clients with their experience and connections to quickly streamline process. Moreover, partnering with a 3PL can lead to cost savings through economies of scale, improved inventory management, and reduced transportation expenses.
Selecting the Right 3PL Partner:
Choosing the compatible 3PL partner requires careful consideration and a thorough evaluation of various factors. Here are some key considerations to guide your decision-making process:
Expertise and Services: Assess your specific logistical needs and ensure that the 3PL provider offers the required services and expertise to meet them effectively.
Network and Reach: Evaluate the 3PL’s network of warehouses, distribution centers, and transportation capabilities.
Technology and Integration: Ensure that the 3PL provider utilizes advanced software and systems for real-time tracking, visibility, and analytics.
Reliability and Track Record: Look for a 3PL partner with a proven track record of reliability, on-time delivery, and exceptional customer service (references and client testimonials, …)
Flexibility and Scalability: A flexible 3PL partner will adapt to your evolving needs, offering scalable solutions and the ability to accommodate growth or seasonal fluctuations.
Selecting the right 3PL partner can significantly improve your supply chain efficiency, reduce costs, and increase customer satisfaction. Collaborating with a reliable and capable 3PL provider will not only streamline your logistics processes but also allow you to focus on your core competencies, ultimately driving your business toward long-term success in an increasingly competitive marketplace.
At US Cargo Link, we are an asset-based logistics provider, meaning we own all the assets necessary to run a client’s supply chain. These could include trucks, warehouses, distribution centers, etc. Contact us today to see how we can fulfill your logistic needs!
Amazon is still shaking up traditional logistics as we know it since we last spoke about it. Shortly after our last blog post about them, Amazon workers went on strike for Prime Day. Two months ago, Amazon workers walked out again for climate strike. Finally, last month Amazon announced they will be cutting ties with delivery companies linked to deaths resulting in more than 2,000 workers across eight states to be laid off. Yet, even with all these protests, walkouts, and bad publicity, Amazon has managed to stay in headlines of logistics news over new, exciting initiatives introduced this year.
Today, we’ll dive into the two highly publicized worker strikes Amazon experienced, the motivations behind them, and the new initiatives announced presumably as a response. We’ll also analyze the implication of the most recent mass lay off to hopefully answer the question: Is Amazon taking the right steps?
It is hard to discuss logistics news without acknowledging the omnipotent presence that is, Amazon. Amazon has grown from an online bookstore to an e-commerce dominator where the smallest changes sends tidal waves changing the landscape of all other e-commerce, retail, and logistics business everywhere. Let’s first talk about the July 16, 2019 Prime Day Worker’s Strike.
The Prime Day Worker’s Strike, though highly publicized, was not as successful as it was originally anticipated despite many social media posts from customers expressing that they would not divulge in the sale to stand in solidarity with Amazon’s employees. Prime Day is one of Amazon’s largest sale outside of Black Friday/Cyber Monday with the ability to rake in up to $5.8 billion, globally in one day. In the end, only 7 sites across Germany and Shakopee, Minnesota participated in the strike.
The motivation for these strikes were sound. Unions are much stronger in Europe, and German Amazon workers routinely strike during huge shopping events like Prime Day often because of low wages, inhumane working conditions, and almost impossible standards/quota. More than 2,000 workers participated. Minnesota’s motivation was more or less the same except Shakopee has a sizable group of East African Muslims as employees that claim even though they are federally allowed breaks for prayer, taking those breaks makes it extremely difficult to meet their quota. With Prime Day coinciding with Ramadan, most find it practically impossible to fast and pray in their work environment. It is already common knowledge that with low wages and individual religious practices aside, Amazon employees are often assigned so much work, it is already a difficult to find time to go to the bathroom without throwing their entire day completely off. Even with Amazon’s raise of “industry-leading pay” to $15/hour for all full-time employees, a lot of workers are still fighting for job stability and full-time status to receive that rate of pay. Almost all who participated in the strike had the time taken off from their allotted 20 hours unpaid time off, of which if they surpassed, is grounds for termination. Amazon went on record to say “roughly 15 associates” participated in the Shakopee protest though other news sources reported up to 78 participated.
In the end, the result of 2019 Prime Day Workers’ Strike barely put a dent in Amazon’s bottom line. Considering there was a workers’ strike last year, this year’s strike was further propelled by Amazon’s announcement of their one-day prime shipping.
Then, there was the thousands of Amazon employees that walked out for climate strike. Amazon is arguably one of the least sustainable companies because e-commerce is inherently less green than traditional retail stores because of transportation emissions. Amazon worsens it by utilizing van deliveries instead of full truckloads. Currently, none of the vans are electric either. However, strategically the day before the scheduled climate change strike, Jeff Bezos unveiled a climate plan for Amazon with the end goal of reaching net-zero carbon emissions by 2040 and purchasing 100,000 electric delivery vans starting in 2021. The question still stands: Is this enough?
Amazon has also since added an “Amazon Day” shipping option that allows the customer to select one day of the week to consolidate all their purchases throughout the week to deliver on the selected day with the least amount of packaging as possible for waste reduction. However, this is an opt-in service and not a default setting at check out. Yet, when customers choose to opt-in, they are eligible to receive digital credits.
While these two sustainable initiatives sound great, it Is also worth mentioning that earlier this month they have announced that $1 items can be delivered for free with this one-day shipping as well. Previously, an order that was under $25 was not subject for free prime shipping. That is all about to change with huge ramifications for one-stop grab-and-go retailers like drug stores. There are other implied ramifications…
On October 11, 2019 Amazon announced that they will be cutting ties with a few of their delivery-service partners (DSPs) because of deaths resulting in more than 2,000 layoffs. You can find the list of layoffs here. This does not come as a surprise since Amazon hold their DSPs to a standard of delivering an upward of 300 packages a day. This is not the first time Amazon has decided to terminate contracts with delivery firms on short notice. Amazon has disclosed that has around 800 delivery firms under contract and at least three Amazon DSPs have filed for bankruptcy since 2018. Since 2014, Amazon has contracted DSPs rather than hiring their own drivers and control a lot of the delivery process. That being said, they also deny any and all liability when people get hurt. It is speculated by Business Insider that “the layoffs could be a sign that Amazon is moving to rely more on these newer, smaller companies over its older partners.” However, smaller and newer 3PLs have no experience in delivering the quantities Amazon expects and may even rely on loans from Amazon to get started. Amazon essentially controls the financial wellness of all these 3PLs without ever being responsible to pay their DSPs’ drivers wages and benefits. This year in 2019, Amazon has become it’s own largest delivery provider surpassing even USPS.
So, is Amazon taking the right steps?
It is an opinion that Amazon is trying to do too much at once. It’s hard to wrap your head around strategies for a such a large and wealthy company like Amazon. Seemingly all set goals are reachable but also….contradictory. It is possible for a company like Amazon to reach net-zero carbon emissions by 2040 since so many companies are already there right now. For example, Unilever, Apple, and soon, Ikea. However, I do tend to side with the opposing idea that it is not soon enough, and they should be pushing for 2030 especially with their recent introduction of $1 and one-day Prime shipping. Even though 100,000 electric delivery vans sound better than 20,000 gas powered delivery vans, their “Amazon Day” shipping is still not the default setting during checkout and the incentive to opt-in seems lackluster. It’s almost as if every time they find a solution for one hot button issue, they counteract it with another premium service literally nobody asked for. Their recent shift from older and larger partners to smaller 3PLs suggests their interest still lies in self-preservation and maybe to take advantage of smaller DSPs with their continuation of denying safety liabilities and exploitation of workers. Considering absolutely everything, Amazon must sort out its internal issues and focus on the wellness of their employees before trying to heighten their customers’ experience and expectations further.
When looking into warehouses to fulfill your business’s logistics needs, you need to be well informed about the options that are available and which type of solutions are best fits for your needs. In this post, we’re providing and crash course guide through the top five types of warehouse storage typically offered.
Practically all warehousing companies offer ambient storage. Ambient storage refers to “room temperature” or a warehouse that stores goods that do not need any type of temperature control. Most products, excluding food and other perishables, would require this type of storage.
Cold storage is used primarily for storing fresh food and other perishables (like plants, medicine, etc.) The cold storage slows down disintegration, bacteria, and deters pests like insects that would otherwise ruin the product if it were left at room temperature. Any product that needs temperature control is kept here to preserve their peak condition until they are transported to their destination.
Bonded warehouses also known as customs warehouses are storage spaces where imported gods can be stored without having to pay tax duties on them. Initial duties for imported goods can be high, so the bonded warehouse acts as a safe zone until they are either re-exported or sold with the duties coming out of the sales profits.
Within this type of storage, there are many different types of solutions. If you are needing to store flammable liquid and chemicals, they may be kept isolated in a specialized storage unit that is locked for extra security. However, products like propane cylinders, could simply be kept within large cages just to keep them from being knocked over and damaged. It can be a little tricky when looking for a warehousing facility to store hazardous materials because even if a company advertises this as a service, their licenses may restrict the type of hazardous materials they can store. So, if you’re specifically needing this type of storage, it is best to be as specific as you can when describing your product to ensure the company you are working with can properly accommodate.
This type of storage is perfect for businesses that handle lots of information on a daily basis that can quickly fill up their office space yet have retention policies put in place that keeps them from properly disposing that information as fast as they obtain them. Archive storages are ideal for important documents and data that no longer need to be stored on site but still need to be archived in a safe place.
September 8-14 is National Truck Driver Appreciation Week! America will be taking time to honor all professional truck drivers for their hard work throughout this week.
Truck driving is so essential to the American economy and one of the toughest, most demanding, and thankless professions out there. There are 3.5 million men and women that not only deliver goods safely, securely, and timely—but also, upholding important safety procedures to keep our roads safe.
If you’re in the logistics industry, we hope that you take this week to really show your fellow drivers just how much you appreciate them! Here are five fun ways to show how much you care:
#1 A Handwritten Letter of Gratitude
With technology these days, it’s so easy to overlook the sentiment that can come from a simple handwritten thank you note. Sending it directly to the drivers’ home and addressing the whole family could be a special touch especially when it comes directly from the CEO. Remember—every day your driver is on the road is time they sacrifice from their family. So, take the extra step to thank their families as well! You could sweeten the gesture even more by including a gift card.
Who doesn’t love gifts?! It could be something for work or something they can appreciate in their own time. The possibilities are endless! Give them a lumbar pillow or a pressure relieving cushions for their long excursions on the road, or an audio book/music streaming subscription for when they are on and off the job. Or, make it super personal by gifting them something you know they’d appreciate a lot!
#3 Company Lunch/Outing
Organize an event for the entire company and their families to enjoy a meal or a fun-filled night of activities. Cut loose at happy hour, play sports/games, or go on an escape room excursion. Anything that brings to team together and build camaraderie.
#4 Put Your Appreciation on Blast!
Start this week with a morning hype session by giving out positive affirmations to each of your drivers. Get them excited for the day and reinvigorate them with motivation! They do important work that can often feel mundane but, nothing is more refreshing than to start the workday with a group of people who are full of energy and enthusiastically expressing gratitude when most of the time, good work goes unnoticed. It could be done in the office as they are coming in; over the radio if they’ve been on the road for a long haul; or even online through social media! (Shout out to our drivers! We appreciate you!) If nothing else, just set aside some time this week with your drivers and tell them face-to-face just how valuable they are. It costs absolutely nothing to be especially kind this week.
#5 Going Above and Beyond
While September 8-14 is National Truck Driver Appreciation Week, you can go above and beyond by celebrating as if it was every single day because where would we be without our drivers?
The study is worth the read and debunks a lot of myths regarding the driver shortage. In it, Kristen Monaco and Maury Gittleman covers:
How the numbers are inflated due to the misunderstanding of the occupational classification system used in federal statistics.
In the study, it discusses how light truck delivery trucks are included in “trucking jobs”. They also note how the estimates uses the total number of CDL holders even though many of the people who hold the appropriate license no longer drive at all.
How truck drivers are responsible for non-driving tasksthat will continue to be in demand as they are incredibly difficult to automate.
These tasks include pre-check inspections and other safety compliances, operating non-truck equipment like forklifts, tarping, fueling, customer service, paperwork, loading, and unloading.
How, if any job is in jeopardy with the advancement of technology and automation, it would be long-haul trucking which is roughly only one-quarter of trucking jobs.
“Our case study of truck drivers suggests, however, that, at least for now, any loss of jobs as a result of automation will be more limited, especially compared with journalistic accounts but also as anticipated by a number of experts.”
– Kristen Monaco
As discussed in previous blog posts, fear that new technology will lead to massive unemployment is not new. This study suggests that truck automation will be comparable to the first introduction of automated teller machines (ATMs). While it first decreased the number of employees required per bank branch, the increase in productivity made it less expensive for a bank to open a branch. In the end, it created more jobs and reshaped the teller position as part of customer service. So instead of anticipating the end of truck driving jobs, automation may reshape the position to something new and useful.
To read the whole study by Maury Gittleman and Kristen Monaco, click here.