There is a lot more that goes into choosing the best carrier for your shipment than most people think. When deciding which LTL carrier to work with, many businesses or supply chain managers will only take the upfront cost of transportation into account. There are a few strategies we will explore that you can use when choosing the best carrier for your company. Here are three simple, strategic ways to reduce supply chain costs:
Reduce DSO and Collect Faster
You can reduce your DSO (days sales outstanding) and be able to collect faster if you reduce the amount of time your shipment takes to get to your customer. Choosing a carrier with a fast transit time is essential to accomplish this. Finding a carrier with dependable ship rates can allow you to begin collecting right away by offering discounts for those who pay within 5 or so days of delivery.
Take Freight Transit Time into Account
It is important to consider transportation time as well as price when you are choosing a freight carrier. If your LTL carrier can provide a faster transit time at a standard or slightly higher rate, you will be able to carry less warehouse stock while improving fill rates. When selecting a carrier, you should compare money you have spent and saved to see if you are actually reducing your supply chain costs.
Overlooking a carrier’s claim ratio can cost you both money and client relationships. It is important to do a thorough investigation of carriers claim rates, their damage reduction processes, and their loading/unloading networks before choosing them for your shipment. Investigating these carriers can benefit your supply chain, your ability to expand sales, earn you referrals, keep carrier continuity and eventually save you money.