The transportation market is extremely dynamic and there are a variety of factors that influence freight rates. There are times when there’s an oversupply of capacity and other times when there’s a severe capacity crunch. In either scenario, but especially the latter, it is important to examine your inbound freight practices to manage your supply chain and transportation costs effectively. Our experts explain the difference between inbound and outbound freight then provide four key tips to help control inbound freight costs.
Inbound freight is the delivery and receipt of materials into your facility. Inbound freight is commonly sent from vendors and includes items such as raw materials or manufacturing inputs. Inbound freight is the opposite of outbound freight, which is shipping product outbound from your facility to your customer.
Make sure all instructions and payment responsibilities have been properly negotiated and submitted before creating your purchase order (PO). By clearly communicating all agreed-upon information upfront, you and your team will be able to avoid excessive costs and routing inefficiencies that occur due to miscommunication.
Because the party responsible for freight charges has control over your shipment’s route, you typically want control over shipping decisions to minimize transportation, handling and processing fees. Some vendors use freight control as an added revenue stream, meaning that you could be paying above fair market rate for that service.
Partnering with a 3PL like Ascent Global Logistics helps you take control of your inbound freight by implementing vendor compliance programs and providing technology to ensure visibility to the best rate, route and mode.
Deciding how to ship your product requires several considerations such as the overall market, the carrier, the delivery timetable and the risk of damage. The “best way” usually is the most inexpensive, which does not necessarily mean the greatest value when it comes to delivery of your freight on time and intact.
Planning ahead will allow you to save time and money on your shipments. Traffic, weather and breakdowns can wreak havoc on your supply chain and your bottom line, particularly when everyone is trying to ship at the end of the month.
Who says logistics has to be complicated? We certainly didn’t. Contact our team to learn more.