Less-than-truckload (LTL) shipping is one of the most efficient ways to move shipments when you cannot justify the cost of a full truckload. Unfortunately, shippers may be losing money on LTL shipping if they do not know how to maximize efficiency and cost-effectiveness in each shipment. According to Joe Lynch, shippers face many challenges and problems in LTL shipping. But, knowing where LTL shipping mistakes are likely to occur can help shippers ensure their freight is delivered according to their expectations and needs. Furthermore, learning to recognize and prevent these LTL shipping mistakes is critical to keeping shipping costs down and fostering productivity.
Take A Look at the Top 10 Most Common LTL Shipping Mistakes Made by Shippers
1. Not Using a Freight Broker
Freight brokers, such as third-party logistics provider (3PL), are evolving in modernity. Freight brokers are no longer just people at an office; they are entire systems and programs that work to compare rates tirelessly and negotiate better deals than their predecessors. If a shipper has not ventured into the services of a 3PL or freight broker, they are losing money somewhere.
2. Avoiding Insurance to Cut Costs.
What happens if a truck overturns at the fault of another driver? Well, the other driver’s insurance may cover the initial damage, but passenger car insurance policies ARE NOT designed to cover thousands, if not hundreds of thousands, of dollars in damaged merchandise. Moreover, natural disasters, theft, and other problems could destroy an entire shipment. If the cost of insurance seems like a deterrent, think about how much the cost of replacing all your freight could you if another’s insurance policy is insufficient.
3. Using Delivery Schedules as “Guarantees.”
Unless expressly identified as a delivery guarantee, a delivery schedule is subject to change. Shippers should not be tricked into seeing an estimated delivery as an absolute factor. If freight needs to be somewhere by a specific date or time, an appropriate service level with a stated guarantee is the only solution to ensure the needs of the shipper and end-user are met.
4. Not Using Pallets.
Palletizing orders takes time, but leaving a loose stack of shipments in the back of an LTL truck is only asking for disaster. If LTL shipping is sending several small items, they should be attached. As the size of the freight grows, a pallet should always be used. This helps to keep packages from flying freely in the back of a van, increasing the risk of damage and lost packages.
5. Validating Addressee Information at Time of Shipping.
Shippers need to confirm addressee information before ever scheduling a shipment. Incorrect data can quickly add up to substantial costs if the information is incorrect. Furthermore, customers may be unreachable to verify address information, so shippers need to be proactive about verifying addressee information. If it seems erroneous, consider the difference between Washington state and Washington, D.C.
6. Picking the Wrong Service.
Your customers have many preferences for shipping, but your company’s preferences could vary. Many customers will leave it up to you to select the appropriate service, but you need to make sure the service will meet the expectations of your customers. Ultimately, try to find out how quickly your customers need a product delivered, and use this information to select the best service level, considering the difference between estimated and guaranteed delivery concurrently.
7. Estimating Weights and Sizes.
Incorrectly estimating the weights and sizes of shipments is likely the most common error made by shippers. In some cases, shippers may be using data from customers to make shipping calculations, but the carrier may re-rate and re-classify shipments after leaving your facility. As a result, all shippers need to weigh and obtain the dimensions of all shipments that they are involved in processing. This helps to eliminate errors before they occur, which will save time and money for all parties. Moreover, this reduces the amount of time needed to correct billing problems during audits as well.
8. Avoiding Ground Transit.
Some carriers may feel ground transit is generally slow. In truth, air transit does move a package between airports faster, but that does not mean the package will have been delivered sooner. The plane has to await confirmation from air traffic controllers, land and follows detailed procedures for unloading. Also, the packages may need to be sorted further, rerouted and reloaded to get to a final destination. In the end, the air shipment may take longer to arrive than sending packages by ground. Shippers should consider always consider all modes of transportation before making a selection.
9. Not Comparing Carriers.
Carriers have different rates and standards for calculating shipping charges. This is particularly the case with dimension pricing. Shippers need to compare the costs of using different carriers for a shipment. This helps shippers get the best rate and avoid overspending when a cheaper solution was available.
10. “Forgetting” About Packages Once Shipped.
Shippers who “send it and forget it about it” are shippers that trust a carrier and customers. While this sounds like an ideal, it falls apart when a customer calls with complaints and refund requests. Shippers should monitor the status of all sent shipments to ensure appropriate, timely delivery. This can be a critical step in reducing the amount of time needed to audit shipments for attentiveness to delivery guarantees.
A smart shipper is a shipper who knows how to get the most benefit with the least amount of expenditure. By knowing what LTL shipping mistakes he or she may make, a shipper can learn to avoid these problems, do the right thing by the carrier and keep prices competitive for the customer. LTL and small package shipping are only going to grow larger, and all shippers need to know how to avoid these LTL shipping mistakes before expansion turns a mistake into a bankruptcy-charged catastrophe.