Managing shipping costs is critical to upholding supply chain efficiency, profitability, and customer satisfaction. But optimizing rates across diverse transport modes—from road and rail to air and ocean freight—presents a range of challenges and complications, especially overwhelming for busy logistics teams.
Technology provides a way forward, allowing supply chain managers to strategically reduce costs through better carrier contract negotiations and scalable process improvements, while maintaining reliable deliveries. With a transportation management system (TMS) by their side, shippers gain the automation, real-time oversight, and analytics they need to maximize savings and optimize multi-modal decision-making across global supply chains.
A cost-effective shipping strategy accounts for all transport modes
Optimization opportunities are available in all phases of the shipping process, from packaging and loading each individual shipment to forming strong carrier partnerships designed to earn bulk rates. TMS technology makes it easy to implement new cost-saving efficiencies across carriers, transportation modes, logistics processes, and borders—dramatically reducing costs and the manual input required from supply chain teams.
For example, one of the most effective ways to save money on the micro level is through effective packaging and load planning. A TMS automates routine order management and load planning tasks for every shipment, using powerful algorithms to boost capacity and select the best mode and carrier based on prices, lane routing, performance, or other custom criteria. These strategies not only maximize space usage and lower per-unit costs but can also help shippers qualify for eco-friendly packaging discounts. Reducing weights and volumes can be particularly helpful in air freight, where charges are typically based on dimensional weight.
On a larger scale, using freight consolidation to combine smaller shipments into larger loads is another way to reduce costs per unit. This is true regardless of transportation mode, but it’s especially effective in reducing fees for both air and ocean freight.
Load consolidation and multi-modal routing save time and money
Freight consolidation reduces costs by grouping shipments by size or weight. If several shipments have similar routes and delivery timelines, agile freight consolidation tools from a TMS can help shippers stay ahead of carrier capacity challenges and achieve bulk discounts. And this technology doesn’t just optimize one form of transportation.
For global companies, a single transport mode sometimes isn’t enough to get shipments from Point A to Point B, while staying on budget and on schedule. When various types of vehicles and routes are stitched together into an effective chain of transportation, it can bring crucial flexibility, cost savings, and agility in the face of unexpected disruptions or unreliable carriers.
Combining different modes into a single route—a practice known as a multi-modal or inter-modal transportation—could mean that a shipment starts on a truck, transfers to a rail car, and then switches back to a truck for final delivery. However, multi-modal planning can quickly become complicated as supply chains cross distant regions, particularly when combined with intricate load consolidation calculations. But that doesn’t mean either practice needs to be manual or laborious. A robust transportation management system, such as CTSI-Global’s Honeybee TMS, can automate and accelerate the process—mapping multi-modal routes, pooling optimal loads, providing access to real-time tracking and analytics, and intelligently pivoting when delays strike. The result is a streamlined shipping lifecycle that minimizes costs throughout order management and execution.
The right technology makes cost reduction actionable and intuitive
Shipping costs fluctuate based on seasonality, fuel prices, demand, and more, making it time-consuming and risky for teams to take on cost reduction alone. Using a TMS to analyze historical data and predict future trends, shippers can identify the best shipping times, modes, and routes with greater accuracy than ever before.
Automated rate comparison tools streamline the process of evaluating carriers, routes, and shipping options, allowing supply chain managers to access real-time rates and quickly choose the most cost-effective options. This technology gives shippers the end-to-end visibility, automation, and quality control they need to proactively resolve issues and make adjustments as needed.
Optimizing shipping rates across different transport modes requires a comprehensive approach that considers each mode’s unique strengths, integrates data analytics, and leverages strategic carrier partnerships. By combining modes, consolidating freight, and negotiating smartly with carriers, supply chain managers can unlock significant savings—without sacrificing service levels. Adopting a flexible, data-driven approach and adaptable TMS technology allows managers to respond effectively to the changing dynamics of global shipping, keeping their supply chains cost-effective and competitive.
Contact us to learn how Honeybee TMS can help you optimize your shipping rates across all modes of transportation.
