According to data from the Council of Supply Chain Management Professionals’ annual State of Logistics report cited by The Wall Street Journal, US companies spent a staggering $1.49 trillion on shipping costs of goods in 2017. That is up 19% from the data gathered in 2008. This includes all types of shipping from air, land, and last-mile deliveries.

If your business relies heavily on shipping companies to move your products across the country or around the world, there are many ways for you how to reduce shipping cost incurred in shipping. Read on and find out where you can cut costs and optimize your supply chain.

Ship when demand is low

Each logistics company has a limited number of vehicles to transport products. During peak seasons, these vehicles are deployed all at once most of the time. The high demand for transport of goods prompts logistics companies to increase their shipping fees to control the influx of orders. This can be a stressful situation for business owners because they will have to pay more on shipping fees. This is also frustrating for customers because many will experience additional surcharges and sometimes, delays in the delivery of an order.

If your business allows you to send out your goods when freight demand is not that high, you can do so. Even just a few days ahead of peak season can make a lot of difference in cutting costs of shipping fees. Of course, this cannot be applied to all types of goods. Perishable items should be shipped immediately and with special consideration on the type of vehicle used to preserve the quality of the product.

Save on packaging

Packaging is one of the main expenses for a business that sends out goods to customers across the country. It’s important to keep them as low as possible, especially when you’re shipping products overseas. Shipping can be expensive, but there are ways you can reduce your shipping costs by using proper packaging and getting the most out of your logistics services.

You can explore different ways to optimize how your products are packed. Use the smallest packaging possible without compromising the integrity of the product. Reducing the sizes of your packaging will greatly help in reducing your shipping cost as well.

If you can, reuse the materials that you already have. When buying your goods from your supplier, you might find shipping materials that you can reuse such as cardboard boxes and bubble wraps.

Optimize your shipment

Every cubic inch of space that you save will help in saving on shipping costs. It is very important to maximize the space that you have in every shipment so that you can make most of the fees that you spend on freight.

You might already be familiar with the steps made by different large companies such as Apple and Samsung when they reduced the sizes of their boxes. This is a smart move that you can replicate as well. It will give you exponential savings when you add on the fees that you have saved just by shaving off unnecessary spaces in your cardboard box packaging.

Increase lead times

Most business owners are aware that expedited deliveries incur more costs. This is because logistics companies have to make last-minute changes to their delivery schedules to accommodate your abrupt request. But honestly, movers can ramp up their prices as they wish because you need their services to move your cargo immediately and you don’t have much choice but to pay premium fees.

If you can help it, refrain from doing this practice as it will hurt your business in the long run. Planning out your deliveries months or a couple of weeks ahead can make all the difference in cutting costs for logistics expenses. By giving your notice to your logistics partner in advance, they will have time to plan out your shipment and they can offer you the best price possible.

Take note of all fees

Shipping costs can be intimidating sometimes, especially when you have a lot of things to think about while running your business 24/7. There are a lot of charges that you will need to be familiar with. You need to fully understand them to have a clear picture of the cost that you have to pay. It is also needed to have a good understanding of these fees so that you will be fully aware of how you can cut costs and save on future shipments. Remember that shipping cost is part of the fees that you need to charge to your customers or paid by your business, and understanding all of it is crucial to making the best financial decisions.

You can always talk to your logistics partner if there is any information in your freight charges that you wish to understand. That way, you will not be caught off guard whenever abrupt changes or problems will arise.

Reducing shipping cost

There are a lot of ways that you can reduce your shipping cost. Freight being one of the major expenses for your business should be something that you need to take a look into from time to time. While it might be initially difficult to understand at first, mastering this part of your business will surely help in making sure that you save money in the long run.