Low price doesn’t mean greatest savings with LTL shipping

When it comes to less-than-truckload shipping (LTL), companies are looking for the right carrier with the best transit times, rates and services.

“It’s a challenge to find the best carrier because there are so many running the same routes,” says Brad Mullins, COO at AMWARE Companies.

When searching for an LTL shipping provider — of which there are many — companies tend to spend a lot of time online visiting carriers’ websites, typing in the same information over and over to get their rates and transit times.

“Shippers that have 100 orders a day are often getting three to five quotes per shipment. The time it takes to do that becomes a challenge,” he says.

Given the consolidation that’s happened in many companies’ traffic departments, finding a third-party logistics provider (3PL) that can not only find competitive rates, but offer other time-savings services, can bring real bottom-line value.

Smart Business spoke with Mullins about how the right 3PL can make shopping for the best LTL carrier easier.

What challenges do companies typically face when it comes to finding an LTL carrier?
Not every shipment is built the same. There are myriad product types under many National Motor Freight Classification designations, all of which are factors when negotiating shipping costs with carriers. And only when carriers have been contacted and specific rates have been negotiated can rates be compared against all others to find the best price and transit time for a particular shipment.

Because the traffic departments of a lot of companies have been consolidated, there’s no longer multiple personnel available to deal individually with all the aspects of the department — loading trucks, finding and comparing shipping rates, scheduling production, etc. It’s often the case that one person is loading trucks and negotiating rates with carriers. This is why 3PLs have become such a key partner in recent years.

How can 3PL companies help with LTL shipping?
Having a shipping partner that has the experience needed to compare shipping costs among LTL carriers is important, and it’s a service that can be found in some 3PL companies. These companies can gather the information and find the best quotes for each LTL shipment, eliminating the time burden while quickly finding the best prices. They’re a partner and a consultant that has the technology combined with an understanding of shipping characteristics to narrow down the choice of carriers.

Some 3PL companies have a full team of dispatchers who can help move freight. They will find the best LTL carrier for the job, schedule the pickup and complete all of the paperwork that goes along with the delivery and deal with any discrepancies to ensure the price quoted is the price charged. They’ll even handle the billing.

Not all 3PLs have a team. Some just have software tied to their websites that traffic department personnel can use to manually search rates.

Companies can also find 3PLs that are able to integrate their shipping software with a company’s existing Enterprise Resource Planning systems. That enables the provider to populate shipping characteristics the moment an order is received, and begins the routing process.

What benefits can companies realize by partnering with a 3PL to handle their LTL shipping?
Partnering with a full-service 3PL company offers relief to a company’s traffic manager, enabling them to get back the time needed to make sure the right product gets on the right trucks rather than managing carriers. There’s also a bottom-line benefit to working with a 3PL.

For instance, some traffic managers can spend three hours every day trying to find the right carrier for every shipment. By working with a 3PL, those three hours can be deployed elsewhere. It means consistently getting the best shipping prices while lowering the time spent finding them, which brings down overhead costs.

Not every 3PL is the same. Full-service 3PLs offer deeper services to manage all of a company’s LTL shipping. Find a company that can be partner and consultant. Working off of price alone will not help companies achieve the savings they’re looking for.

Insights Logistics is brought to you by Amware