3 Ways CPG Shippers Can Reduce LTL Shipping Costs


Research has determined that nearly 37% of your sales dollars are likely buried in logistics costs from vendor to customer. A strong logistics process provides savings, which is why in this article, Millennium Logistics Management would like to provide you with 3 ways CPG shippers can reduce LTL shipping costs.


The heavy dependency of LTL transportation (Less than Truckload freight) has lead CPG shippers (CPG stands for Consumer Packaged Goods) to several inefficiencies. CPG shippers have been facing significant obstacles in transportation over the past few years and that is because they rarely have the freight volume to utilize a full truckload. They oftentimes feel stuck using much more expensive and slower LTL transportation.


Although LTL transportation is expensive and rates continue to climb, there are ways to make LTL as efficient and cost friendly as truck load shipping. Doing so is quite essential because LTL shipping is a necessary part of a CPG shipper’s transportation strategy, therefore, the following are 3 ways CPG shippers can reduce LTL costs:


 1. Load Consolidation:

It’s a fact, retailers bring in products from thousands of suppliers all over the world and CPG shippers ship to the same retail location as everyone else (including their competitors) which is why it makes sense to consolidate loads to make full truckload shipments. Load consolidation is quicker and utilizes available trailer space, leading to lower costs and increased service levels.


2. Cross-Docking:

Many CPG shippers find the cross-docking process difficult due to limited inbound freight visibility. It is improbable to cross-dock your entire freight but when a strategic portion of your freight is cross-docked, it is possible to save money by eliminating the time and costs associated with the handling and storage of products at a warehouse facility. Freight moves through your supply chain and to customers more quickly as well.


3. Rate Negotiation:

When you negotiate rates, keep the LTL carrier base small so that bids are more competitive. There are various ways you can negotiate rates with LTL carriers (which includes load consolidation to leverage lower base rates, fuel surcharges and even accessorial costs). In addition to negotiating rates, maintaining accurate data and transparency in the process is important because carriers will want to work with you.



Applying these three tactics will help you achieve a decrease in costs and you will most likely also experience a significant reduction in inventory carrying costs, decreased occurrence of lost or damaged products and a more efficient transportation strategy all of which are important aspects that directly contribute to the success of your business. Of course, you always have the option of partnering with an experienced third-party logistics company such as Millennium Logistics Management to help you manage the costs and complexities of LTL transportation. Contact Millennium Logistics Management today for more information!





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