The Best Way to Get a Discount With a Freight Carrier
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There is only a couple ways to do this. First is volume, like everything else in the world the more you go with a certain company usually the better your price will be. Second is to know someone on the inside that can give you rates that bigger companies get. This is possible only if your representative has the ability to do so, or if you have a family member or someone that doesn’t care about making money from you. Which is very few people. The third is to go through a Third Party Logistics Company. They usually have discounts set in place with a number of freight carriers and can get rates that you would never be able to touch.
A lot of people discount using a freight broker. They think it is an unnecessary part of the logistics process and the freight broker is putting a mark-up on the freight. This is a half truth. Yes they are putting a markup on the freight. But the markup is usually way below what you would ever be able to get a rate at. These brokers move millions of dollars with the carriers. So their rate hypothetically would be something like $5 and then they would mark it up to you at $8. But if you were to go to the carrier directly you would be getting it for $15. Now the broker looks more like a saint than a scam artist.
Not only this but brokers give you options of carriers. You will not get this when you use a freight carrier directly. You may be in tight with a certain freight carrier. But what if you run into a situation where your best customer requests that you use a different freight carrier. Now you have to go to that freight carriers website and get a rack rate. This is never good. But if you had an account with a freight broker then they would have the option of choosing that freight carrier at your discount with the broker. The broker doesn’t give you discounts per freight carrier; they give you a discount off the whole spectrum. So you discount is the same with every freight carrier.
Another thing that people don’t realize is that discounts with freight carriers mean nothing. I hear people all the time brag about having a 70 to 80 percent discount. I just smile because I don’t know how to tell them that this is a sales pitch given to them by a representative. Sure you have a 70% discount, but from what? This 70% could be a discount from some made up rates. Representatives can play with rates however they want to a certain extent. If you were to get an actual 70% discount an upper level manager would have to approve and have a damn good reason to give that to you. There is just not enough room for profit if everyone is getting this. So next time a rep tells you this your reply is, “from what rates”?
If you have any other further question I would be more than glad to help in any way I can. I want to inform you of the best way form an insiders eye.
George Martins has been in the transportation and logistics business for over 15 years. If you are looking for a way to save money on your freight shipping then he can help you do so. LTL shipping rates fluctuate and in the economy we are currently in, cutting costs on shipping can help strengthen your bottom line. Contact him at http://www.savemoneyonfreight.com Or if you would like to follow his insight to the current shipping industry visit his blog http://www.savemoneyonfreight.com/blog
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