Feel like you’ve been run over by skyrocketing shipping costs? Good news: There are four ways you can steer clear of some of the conditions causing costs to spike. First, take comfort that you’re not alone. Rising shipping costs are virtually a universal problem. The more you ship and/or receive, the worse it is.

In better times, average shipping costs were generally 5% to 10% of gross revenues. But now, higher transportation costs — mainly fuel — is pushing this percentage upward. As a result, third-party logistics providers are anticipating an increase in business of 30% to 40%.

Short of simply hiring a 3PL, there are four steps you can consider taking:

1. Consolidate/combine shipments headed in the same direction. If you’re currently making a trip on Monday to one place, and Tuesday to another spot that’s in the same neck of the woods, arrange with the folks on the other end for the flexibility to save one of the trips.
2. Establish strength in numbers. Smaller companies that lack the heft to secure discounted rates have another option. Freight forwarders and 3PLs can coordinate shipments from multiple locations. The fee you pay for the service can be more than offset by the discount you’ll earn.
3. Renegotiate current terms. Charges and surcharges that might’ve seemed reasonable when a pact was signed could have become outdated in light of today’s economy. In the interest of keeping your business (and waning business from customers overall), you might be able to set new terms for freight contracts. One area to target: fuel surcharges. Most are tied to national averages; if your local prices are lower, ask that your surcharge be based on that.
4. Tinker with the timing and shipping methods. Is it possible to negotiate longer lead times with vendors or customers? What about changing the mode of shipping to a less-expensive option?

Tags: 3PL, costs, rates, shipping, surcharges, transportation