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What Is A Freight Charge? Ways To Cut Your Logistics Cost

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Sanjay Negi

Assistant Director @ Shiprocket

April 14, 2022

5 min read

Freight charge, also known as freight rate, is the amount paid to a carrier company to transport goods from the point of origin to the delivery point. 

The freight charge is calculated based on the mode of transportation and the distance between the pickup point to the destination. 

With the rising transpiration costs and market volatility that goes to and fro between the buyer and seller market, it is imperative to minimize transportation costs. 

What Is A Freight Charge

Here are a few innovative ways to reduce transportation costs-

Digitize Your Inbound & Outbound Logistics Processes

Automating your manual processes reduces costs and streamlines operations which also allows for better management. Not only does it improve efficiency, it also makes your order processes quicker and more efficient. 

Streamlining operations saves a lot of your team’s time and give them time to focus on other tasks. 

Understand Accesorial Charges

These charges only occur on account of poor communication or inaccurate documentation. Knowing what makes carriers happy, such as shorter wait times, can help to eliminate these charges.

 Become A Shipper Of choice

In the changing times, when everyone is delivering orders and every brand is offering home deliveries, shippers have become choosy. Making it easy to do business with your company will improve your carrier relationships and help you get preferential rates. 

Eliminate Operational Silos

It is extremely important to connect transportation operations with procurement, ERP, and other systems. This will reduce barriers between departments and streamline communication. This will also digitize your shipment processes once your ERP is integrated and will eliminate any double data entry. This not only cuts administrative costs, but also speeds up the shipment scheduling processes. 

Use Analytics To Improve Operations Continually

Reviewing historical data and analyzing trends can help you go a long way as you can easily find bottlenecks that will make the processes slower and will add costs. 

Use A Digital Supply Network

You can connect to your carriers, suppliers, and trading partners via a digital network, allowing your business to foster collaboration for sharing or consolidating loads. The fuller the truck, the better the transportation spend.

Reduce Transportation Costs
Reduce Transportation Costs

Gain Network Visibility

Connecting to all trading partners allows your business to gain visibility into what is happening on the network so you can respond to alerts proactively. Visibility enables optimization within the organization to reduce errors and shipment lead times.

Tap Into New Data Source

Smart devices have the ability to acquire a massive volume of relevant data about your supply chain. The difficult part is how to link the information about transportation assets, weather, or product containers to the relevant supply chain transactions. Only then can this data elevate to information that improves your visibility solutions and the value they provide.

Share Sales Forecasts

This will help your carrier to be alerted when trucks are needed and will further enable you to save costs. 

 Go Out To Bid More Often

To offset tight capacity and rising shipping costs, shippers should go out to bid for new transportation contracts more than annually to find the best rates and avoid potential disruptions from transportation shortages.

If managing business logistics effectively has proven tricky for your company, turning to a third-party logistics (3PL) business might be the solution you need to kick-start your efficiency. The two most frequently outsourced logistics processes are warehousing and transportation. 

Shiprocket Cargo is a B2B shipping and logistics aggregator in India and makes cargo shipping effortlessly easy for their customers. Shiprocket Cargo and streamlines Cargo and B2B logistics with its vast network of carriers. You can now track all your orders and keep customers informed about the courier movement.

How Does Rocketbox Work
How Does Shiprocket Cargo Work

How does Shiprocket Cargo Work? 

  1. Create Shipment- Upload your orders in bulk, connect your online store, integrate our API, or manually create a new shipment on Shiprocket Cargo.
  2. Choose a Courier Partner- Shiprocket Cargo’s AI-driven tool recommends carrier partners based on your order details, shipment weight, and budget. You can either go with our recommendation or choose your preferred logistics partner based on their rates, SLA performance, and user ratings.
  3. Prepare Shipment-Download and print out the shipment label and wait for the pickup. You can also manage invoices, Proof of Delivery (POD), and Non-delivery reports (NDR) with Shiprocket Cargo. 
  4. Analyze- Track orders, notify customers, and analyze your shipping data in the most effective way possible to optimize your delivery KPIs. 

B2B orders are very complex than regular B2C eCommerce sales. The customer acquisition cost is higher, the time taken to acquire customers is also much longer and it needs more advanced technologies like punchouts, RFPs, and EDI. However, your operational efficiency can be increased by using an order management system combined with best-practice workflows and a solid strategy. Shiprocket Cargo enables you to simply B2B and cargo shipping in just a few clicks.  

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