CAI Transportation Blog

How to Minimize Unexpected Transportation Costs

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Any business that depends on having goods moved from one place to another has experienced the frustration of unexpectedly high and fluctuating shipping costs. When these expenses increase without warning, managing a budget can become difficult; as does setting expectations when you don’t know what to expect.

There are various factors that can cause shipping costs to rise. While some are complex and beyond your control, there are strategies you can adopt to keep your actual shipping costs in line with your projections and within budget. Here are a few things that might help you minimize unexpected costs and get a more accurate idea of prices from the beginning:

Work with an experienced logistics partner

If you don’t already have a strong relationship with your third-party logistics (3PL) provider, now is the time to develop one. These companies know all about capacity, routes, regulations, and all the other factors that affect your ability to ship your goods as smoothly and inexpensively as possible. They can help identify which carriers will give you the best rates and have the capacity to move your goods.

Keep in mind that a low price is not always the best way to choose a carrier. Your 3PL will also have insights to ensure that the carriers you work with have the capabilities you need and the track record to get your items moved efficiently and safely. Having the right carriers can help prevent unnecessary inconvenience or liability. In addition to the time you’ll save compared to trying to source qualified carriers on your own, you’re also likely to avoid tacked-on fees. Your 3PL partner can give you realistic quotes early in the process so you’re not surprised later on.

Know the regulations at your destination (especially if you’re shipping overseas)

Sometimes businesses are surprised by fees when shipping items internationally. These costs, along with efficiency bottlenecks, can come from customs in the destination country. It’s helpful to know ahead of time that shipping providers may charge additional handling fees for goods shipped overseas. These include customs clearance fees, security fees, advancement fees for paying duty and VAT on behalf of the recipient, and others.

The customs clearance process varies depending on the destination. Shippers should familiarize themselves with the average timelines and costs ahead of time. This is another benefit of working with an experienced 3PL partner; they should be able to highlight the differences between each of your destinations. This will help you get a realistic idea of the fees and timing involved in shipping your goods.

Expect the unexpected

Even with ample preparation and realistic expectations, sometimes things don’t go as planned in the shipping process. Building some flexibility into your plans is a great way to help you rebound when problems arise.

Try to get as much visibility into your supply chain as possible so you can stay aware of any potential issues that might affect your costs and timeliness. You may also want to work with your 3PL partner to make contingency plans for what to do in case you run into any unforeseen issues. Know your worst-case scenarios and having a plan in place for them. This will help you avoid the shock and cost that come along with trying to hastily restore your supply chain with only a few days’ notice.

The key factor in all these solutions is a pretty simple one: communicate with a trusted third-party logistics partner. They’re there to help you navigate the complexities of shipping goods and avoid inconvenient surprises. Taking advantage of their expertise can help you maintain efficient operations, and save you money which avoids headaches.