The Right Questions To Ask When Cutting Transportation Costs

When you rely on private carriers to maintain your supply chain operations, you have to be figure out where you can cut transportation costs, When you are in search of Pennsylvania, New Jersey and Delaware dedicated trucking services, there are some questions you can ask and some action you can take the reduce costs dramatically.

How do driver pays compare with the market rates?

This is an important question to ask so you can calculate the pay down to the mile. Compensation consultants can help you or you can use the logs that drivers currently use. To determine market rates, use driver magazines to see what companies are offering.

Is the fuel surcharge program fair?

You need to know how your provider calculates fuel surcharges. It’s important to pay for the fuel associated only with the freight that belongs to you.

Are you optimizing your equipment?

It’s possible to optimize your delivery schedules and cut some of the out-of-route miles logged for the trucks. Each truck in your fleet needs to keep accurate records and if drivers are going outside of their delivery range, you need to find out why.

What is the carrier approach to life-cycle management on equipment?

You want to optimize maintenance spending. It can be advantageous to explore used equipment the next time you need to purchase.

Are you recovering all costs related to transportation?

Review your pricing and distribution strategies. If you don’t have a transportation cost to serve your employees or you are not recovering all of the costs, you may need to rethink your strategy.

What is the financial stability of your carriers?

The financial stability of your carriers can impact transportation costs dramatically. You can review your current carrier base. Those with a solid cash position should be chosen. Be sure you find carriers with a long history and that has a network that can meet all of your distribution needs.

Are you still using the same carriers as you were 5 years ago?

Sometimes you need new blood in your business. Put the transportation aspect out for bid to see what the market consists of. See if modal shifts can be made to save some of your costs. You may be able to limit the deliveries that don’t consist of a full truckload and instead use full truckloads to lower costs. You may also be able to look at dedicated contract carrier instead of private fleets.

How many carriers do you have?

The more carriers you have, the more cost you have invested to manage the relationships. Consider consolidating with fewer core carriers so you have a stronger negotiating handle.

Have you identified the costs of your fleet effectively?

You need to know how much capital you spend on noncore capabilities. This means you want to review maintenance costs, fuel costs, and do a cost analysis with your insurance provider.

These questions, when you ask them honestly and search for the answers, can help to cut a lot of costs.

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