Freight Management is a strategic system to optimize the efficiency of freight and commercial transport. When you think about it, the numbers of big rig trucks you see on the major thoroughfares they seem countless. We realize that the trucks are transporting goods and more than likely transporting the majority of goods. We don’t realize however what the system that lies behind all that transport is. It’s like a huge puzzle where each piece fits together perfectly and intrinsically. That’s where logistics plays a key role. Logistics takes into consideration shipping practices as a whole which includes the shipment size, vehicle type, mode of transportation, facility sites, and frequency of shipping.
So many factors come into play for freight management, with the priority being to minimize freight costs. Take into consideration the dramatic increase in fuel prices leading up a year ago and how they greatly affected shipping costs involved with transporting products and goods. Suppliers passed on their increased freight costs either by increasing the cost of the goods directly, or indirectly by charging surcharges on shipping. In the end, consumers paid more for items in stores or at restaurants. The bottom line is the bottom line. Freight management helps to keep freight costs lower which directly affects the bottom line and the price paid by all of us for goods and supplies.
There are a number of approaches to implement freight management in the transportation of goods. When possible shippers are encouraged to utilize either water or rail systems. Standard trucking of goods can cost as much as ten times more then shipping by water or railroads. Other ways to optimize shipping through logistics and freight management include optimizing truck loads by improving the routing and scheduling to avoid empty trucks on return trips. Organizing regional deliveries to reduce trips, not only saves on energy expense, but also the benefits to the environment while minimizing freight costs to the shippers. The two go hand in hand when you consider the costs involved in the energy utilized and the pollution expended during the process of shipping.
Freight costs are a considerable expense to take in to account when one who produces goods determines a fair yet profitable price to charge for their product. Freight management is the tool used to not only help minimize that expense but also help the in the determination of the set price. A freight management company can provide an analysis to the manufacturer the exact cost per product of the anticipated freight cost.
Not only does shipping involve shipping your product across the country and around the world, but also the regional delivery of your goods into the hands of the final destination or the consumer. It’s a web of events that has evolved into a major undertaking too great for an individual producer or smaller company to take on. Again, it all goes back to efficiency and minimizing freight cost which is the purpose of freight management.