Put on Your Cape! Use Negotiation Tactics To Lower Freight Rates
Most trucking companies are facing a dramatically declining demand for their services due to the coronavirus pandemic. Many people have cut spending in half or more in the wake of massive shutdowns that have caused a tidal wave of unemployment.
A much smaller number of trucking companies, those that deliver items deemed essential, are dealing with a surge in business. Essential items like groceries, medical supplies, hand sanitizer and toilet paper have become nearly impossible to find in brick-and-mortar stores.
While freight rates do not rise in the first scenario, where demand for non-essential items is lagging, using negotiation tactics to lower freight rates is still essential. In this scenario, the reason is, budgets are being stretched to their limits. We do not need to tell you that the coronavirus pandemic has wreaked havoc on many businesses and the economy.
In the second scenario, with the demand for trucks increasing, freight rates typically follow suit. Loads that remain on a load board for a prolonged period of time, such as when the demand for trucks is higher than the supply, can also prove costly.
Given the challenging circumstances many businesses are facing, the last thing you want is to pay inflated freight rates. Fortunately, there are ways you can avoid doing so.
Run A Carrier Pricing Comparison
While some carriers may try to capitalize on the demand, others will still play fair. Never settle on the rate you get from the first carrier you contact, especially if it is high. You should always compare rates across different carriers, but it is particularly important during the coronavirus outbreak.
Think about the carriers you have used before. Do you have an extremely positive relationship with any? If so, approach them first. They may give you a lower rate.
If you want a foolproof way to get real-time carrier comparisons for drayage moves, you need Draydex™. The TMS extension from Freight Management, Inc. (FMI) features the industry’s most accurate drayage spot index, offering:
- Ramp and port pricing from all ramps and ports, not just some
- Informative carrier comparisons that give you the power to choose
- Lightning-fast booking speed that lets you jump on low rates
- Instant alternate route pricing to quickly find cheaper routes
The free “Book Now” function gives you the power of instant drayage pricing with capacity. The pricing FMI provides is highly competitive and includes several accessorial charges.
FMI also makes its rate management system (RMS) available free of charge. By using the RMS, you will save hours of time previously spent drafting, sending and waiting for responses via email. You will also banish the need to scribble line haul, fuel costs and accessorial charges on a scratch pad and then painstakingly calculate the total expenditure of each rate.
The RMS allows you to send and store all of your drayage rate requests in one easy place. You can access this information at any time. Better yet, FMI does not impose a cap on the number of rates you can obtain per month. You get unlimited access to as many rates as you need. You can use this information to inform your negotiation tactics to lower freight rates.
Ask About Associated Fees
Every single shipment comes with fees; this is inevitable. However, you can get all or most of these fees rolled into the freight rate. Ask questions to ensure you are crystal clear on potential fees including:
- Special permit obtainment fees
- Accrued detention rates
- Lumper or dock fees
- Fuel surcharge
- Route tolls
Alternatively, you can use FMI’s rate management system. As mentioned above, the RMS provides information about the rate and accessorial charges.
Look Out For Your Business
Using a carrier that fails to meet compliance, insurance or safety measures can prove costly in many ways. If disaster hits and your carrier is not fully compliant or insured, the delays that result could alienate your customers. Worse yet, you could end up in legal trouble due to the carrier’s lack of responsibility.
Draydex gives you the ability to monitor carrier compliance, insurance and safety so that you can circumvent unfortunate circumstances that could otherwise occur. Think about how much money, time and customer trust you could save by gaining access to this critical information. Choosing the right carrier is a key factor in negotiation tactics to lower freight rates.
Let Us Protect Your Bottom Line During COVID-19
Are you worried about escalating freight rates? Freight Management, Inc. is here to help, during the coronavirus outbreak and following it. When you use the free spot market index, “Book Now” function and rate management system, you get:
- High-level, instant access to real-time market rates
- Actionable insights
- The resources to monitor your shipments 24/7
When you are able to obtain the information you need, you gain the power to negotiate and select competitive freight rates that will protect your bottom line during this uncertain time.