Distinguishing Low Pricing From a Future Headache

  • Distinguishing Low Pricing From a Future Headache

    Nearly all products that you interact with daily have passed through our transportation system at some point. Whether it be the toothbrush that you brush your teeth with in the morning to the pillow that you lay your head on at night, chances are its journey to your home included being on a truck, in a plane, on a boat or some combination of all before it came into your possession. Moving freight around the world can be very costly.

    Every shipper has a litany of providers that they can choose from. However, the real question is, what is the true cost of finding a reliable logistics provider that will not only help you but your bottom line, but will actually add value to the services they provide?

    The bottom line is the main concern of any business in operation. Cutting costs is a top priority, however, there are ways to do this while not cutting service. Any shipper can share horror stories of the time they received rock bottom rates from a transportation company only to find that the headache and hidden costs greatly outweighed any potential savings. The allure of these companies is clear, they offer immediate gratification. Their rates will often leave you asking, how are the able to do it for that price? Unfortunately, the answer to this question is often that they cannot. This instant gratification does not take into consideration the long-term cost/benefit of utilizing these types of providers to fulfill your shipping needs.

    The production and shipping process is a chain and as such, it relies on every link functioning properly or the whole system falls apart. It is because of this, that comparing shipping cost alone does not give one a full picture of the overall savings that a logistics provider can offer. To produce and ultimately ship a product, a company must have a number of steps completed before the final product is ready to be loaded and shipped out on a truck to the end user. This includes receiving their inbound raw materials used for production. Much like outbound deliveries, these shipments have a deadline that must be met. Furthermore, if these deadlines are not met, the consequences to your business are often more severe than outbound shipments.

    If a company does not receive in the materials they need to produce their goods, this could cause a chain reaction through the supply chain that could result in shut downs and missed outbound loads. If a logistics provider offers highly competitive rates, but does not make their inbound deliveries in time to meet a company’s production schedule, that product does not get produces and therefore cannot be sold. While your rates to ship that shipment into your facility may have been 10 or 20 percent lower than your previous rates, the costs associated with your production lines shutting down will greatly outweigh the benefits of the trucking company’s low costs.

    The same is true for the outbound. Once a product has been produced and is ready to go market, retailers and distributors are counting on your product being at their facility when it comes time to fulfill their orders. It becomes apparent quickly when the cycle of shipping and receiving is viewed as a continuous loop, that one bad link in the chain can shut down the whole system.

    Therefore, when choosing a logistics service provider, considering all aspects of their duties to your company is of the utmost importance. Accuracy is also one way shipping companies can help their customers maximize their cost savings. Again, as a trucking company, you may have the lowest rates. However, if your product is routinely damaged, lost or is re-classified, it can end up costing your customer much more than they save.

    At PNGLC, we refer to this hidden cost saving opportunities as the PNGLC efficiency savings. These are the additional savings that we help generate behind the scenes, for all our customers. In fact, we do not have any customers that have save less than an additional five percent over as a result of pre-audits, post-audits, consolidated invoicing and the increased visibility we offer our customers through our easy to use web portal.

    When you are considering changing or adding to your carrier base or perusing a third-party service, make sure that all factors are considered. While it may be enticing to see the immediate savings, make sure all factors are considered.
    If you have any additional questions regarding our PNGLC efficiency savings, or general inquiries about your company’s true shipping costs, please do not hesitate to contact us at sales@pnglc.com or 717-626-1107 x 3

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