MARGIN Builders By Carlo Chatman
Shipping solution F
Partnering with a third-party logistics provider can cut your freight costs
or lumber and building materials suppliers looking for relief from high shipping costs and market volatility, a professional, third-party logistics (3PL) provider can save an extra 10% to 18% off truckload and LTL freight costs if they routinely make multiple shipments to multiple locations and work with numerous freight carriers. For every $100,000 in freight costs, that’s an extra $10,000 to $18,000 in savings. With various factors driving up freight costs today, it is critical to work with an expert 3PL. These providers can secure the lowest freight prices due to their longstanding relationships with carriers, substantial hauling volume, as well as experience in spotting mistakes in freight classification. As the industry tries to recover from logistical disruptions caused by the pandemic, the spike in freight prices is
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due to a host of factors including higher fuel costs, a continuing driver shortage, and tight truck capacity. Freight costs are up 15% in 2021 over already-high rates according to data from the Journal of Commerce. In fact, DAT Trendlines reported in July 2021 that fuel costs were up 36.5% in June 2021 over June 2020, and loads were up 101.5% in June 2021 over June 2020. “When industry freight costs rise, it’s more important than ever to find the best price,” states Kenny Mealer, shipping manager of CrossRidge Precision Inc., an Oak Ridge, Tn.-based company offering precision machining and assembly of aerospace, automotive, nuclear, heavy truck and industrial products and components. While most building products suppliers can expect rising shipping rates as the economy improves and carriers
n The Merchant Magazine n June 2022
regain lost ground, the most proactive are seeking to partner with a professional, third-party logistics provider (3PL). A 3PL can lower freight costs beyond a company’s existing discounts by negotiating additional discounts based on the 3PL’s relationship, reputation, and volume of business with established carriers. Limited competition and congestion in the change supply has created a significantly inflated rate for LTL and truckload. However, when it comes to truckloads, securing the best price is all about relationships and competitive bidding, according to Larry May, owner of Freight Management Systems (FMS), a Knoxville, Tn.-based 3PL routing approximately 20,000 freight moves each year. “We try to maintain important significant relationships with a number of truckload carriers that will always put Building-Products.com
