Logistics companies are designed to make shipping your products easier. They have established relationships with carriers who have proven themselves on loads and processes in place to handle invoices and get the drivers paid. They follow up with drivers and receivers and chase down paperwork. They take those calls from drivers in the middle of the night so you don’t have to. And the majority of reputable logistics companies do all of these things.
But making your shipping easier is not the only way third-party logistics (3PL) providers can help you. They can also offer shipping solutions that are more cost-effective. Here are a few ways we have recently helped our customers save:
Combining LTL Shipments – Customers often don’t have enough product going to one location to fill an entire truck. Less-than-truckload, or LTL refers to this type of situation. Carriers are willing to haul partial loads anywhere they need to go, but they aren’t willing to take much less for a partial load because they are still driving the same distance whether the truck is full or half empty. Logistics companies have so many loads traversing the country every day that they can often combine partial loads that are headed in the same direction, saving shippers money by allowing them split the transportation cost.
Offering Set Rates on Dedicated Freight – Business owners who don’t sell produce but work in heavy produce areas know firsthand how hard it can be to find a carrier to ship their products during produce season. Carriers also know that the influx of produce makes shipping capacity scarce, so they often increase their rates. This scenario is not just limited to produce season, it also happens around certain holidays. Legion makes arrangements with customers who have year-round freight to help them avoid these seasonal increases. Customers who dedicate a certain amount of freight to Legion year-round can enjoy the same rates, regardless of what season it is.
Helping Drivers Prevent Deadheading – This may sound like a benefit to carriers, and it is, but it is also beneficial to shippers. Deadheading is when a driver makes a delivery, but doesn’t have a load to haul on his way back. When this happens, drivers often ask for a higher rate to cover the return trip. As an individual shipper, the chances of you having something to deliver and pick up in the same location are probably fairly slim. On the other hand, Logistics companies with their multitude of customers and carriers regularly find loads for drivers to haul on their way home, so you are truly only paying for your load.
Offering Other Shipping Solutions – One of our customers was spending $12,000 to have a team of drivers deliver their products because of tight shipping deadlines. When they started working with us, we asked them if they had ever considered air freight instead of over-the-road shipping. They agreed to give it a try. Not only did their shipment get to the destination faster, this method also saved the customer 50% in transportation costs.
Don’t let your logistics company get away with just getting your products from Point A to Point B. Make them earn their keep by saving you money.