Want to slash your freight spend without sacrificing reliability?
The largest problem plaguing mid-size companies with long-haul freight is that they often can’t get the lowest possible prices from carriers. They’re too large to fly under the radar with smaller carriers, but not large enough to demand drastic discounts like the largest shippers can.
The result?
Bloated freight budgets that quietly eat into margins month after month.
Now for the good news… With a strategic approach to freight, the situation can be turned around entirely. Mid-sized companies can reduce longhaul shipping expenses and gain competitive advantage.
This guide breaks down exactly how to build that strategy from scratch.
What’s inside this guide:
- Why Long-Haul Freight Costs Keep Climbing
- The Building Blocks Of A Cost-Effective Freight Strategy
- 5x Smart Moves To Cut Long-Haul Freight Costs
- Tracking What Actually Matters
Why Long-Haul Freight Costs Keep Climbing
Freight costs aren’t going down anytime soon.
Fuel costs, driver shortages, equipment expenses and fluctuating trade policies have converged to form a perfect storm. Rates are rising on long-haul freight and many medium-sized businesses are suffering.
Just look at the data…
National truckload spot rates are hovering around $2.80/mile, up 23% year-over-year. That’s a huge increase for any freight mover operating at scale.
And here’s the kicker:
Large enterprises absorb them via volume discounts and captive fleets. Mid-sized firms usually have neither so they pay spot rates when capacity crunches occur.
This is where a well-planned freight strategy comes into play. Leveraging the proper mix of modes, partners and routing decisions — such as working with an intermodal service provider like Cornerstone Systems — can help mid-sized businesses cut their long-haul freight costs while maintaining on-time deliveries.
Sounds too good to be true? Stick around…
The Building Blocks Of A Cost-Effective Freight Strategy
A solid freight strategy isn’t built overnight.
It requires thoughtful planning, strategic partnerships and an efficient process. The objective is straightforward: Reduce spend without sacrificing service by striking the perfect balance.
Here are the four building blocks every mid-sized company needs:
- Mode mix: Knowing when to use truckload, less-than-truckload, intermodal, or expedited services
- Carrier base: Building relationships with the right carriers for each lane
- Lane planning: Understanding which routes need to run regularly and which don’t
- Visibility tools: Tracking shipments, costs, and performance in one place
If you get these three levers right, a freight spend strategy will begin to look very different. Miss any of them and you are guaranteed to overpay.
Now let’s get into the specific moves that will cut costs…
5x Smart Moves To Cut Long-Haul Freight Costs
These are proven tactics that work right now. They don’t need truckloads of volume or budgets. They just need a strategic approach to your freight network.
Use Intermodal For Long-Haul Lanes
Intermodal is hands down one of the best ways to cut long-haul freight costs.
Why does that matter? Because intermodal is truck-rail transportation. Trucks transport the pickup and last-mile delivery. Rail moves the heavy middle long-distance haul. Because rail uses so much less fuel than long-haul trucking, the savings really add up.
The magic number for intermodal starts at anything greater than 750 miles. The farther the lane, the greater the savings.
For mid-sized companies, intermodal offers:
- Lower per-mile costs on long-haul lanes
- More predictable pricing through contracts
- Less exposure to driver shortages
- A much smaller carbon footprint
Eliminating mileage over 750 miles is a no-brainer if you have lanes like that.
Build A Core Carrier Program
Working with too many carriers creates chaos.
A core carrier program consists of a shipper selecting a handful of preferred carriers to send the majority of their freight with. By building great relationships with these carriers, you can expect to see improved rates, service and capacity even during strained markets.
Try to have 5-10 core carriers for your primary lanes. Supplement with spot carriers for overflow cargo only.
Consolidate Shipments Where Possible
Half-empty trailers are money in the trash.
Consolidating several smaller shipments into one truckload can lead to significant savings for mid-sized companies. This process works best when businesses are shipping to the same region or customers.
Planning is everything. Review your shipments for an average month. Are there days where you have multiple LTL’s headed to the same general region? There are opportunities to consolidate right in front of you.
Lock In Contract Rates On Predictable Lanes
Spot rates are wild. Contract rates are stable.
Securing a contract rate is one of the best financial decisions that any consistently running lane can make. It eliminates spot market volatility and safeguards margins as capacity becomes scarce.
Truckload linehaul costs per shipment increased 10.2% sequentially during one quarter, erasing much of anyone’s ability to absorb spot price increases.
Audit Freight Invoices Regularly
Freight invoices are full of errors.
Detention fees, fuel surcharges, accessorial charges…it piles up. Medium businesses that fail to review their invoices pay for errors that are never fixed.
A monthly freight audit will:
- Catch billing errors
- Identify trends in extra charges
- Flag carriers that consistently overcharge
Companies typically recover between 3-7% of their freight spend by simply auditing their invoices correctly. That is a significant ROI for one small monthly activity.
Tracking What Actually Matters
A freight strategy without metrics is just a guess.
Mid-size companies should be measuring to see if tactics are working. Here are some numbers to consider:
- Cost per mile: Track this by mode, lane, and carrier
- On-time performance: Late deliveries cost more than late freight
- Damage rates: Damaged freight kills margins fast
- Tender acceptance: Are core carriers actually taking your loads?
Monitor these scores monthly. Decreases in performance or increases in cost are indicators that intervention is needed before the situation worsens.
The Final Word
Building a cost-effective freight strategy isn’t about cutting corners.
Wisdom is choosing the right moves. Smarter mid-sized companies that strategically move long-haul freight with intermodal when it works, foster carrier partnerships, secure contract rates and measure what matters can rival larger companies.
To quickly recap:
- Understand why long-haul freight costs are climbing
- Build a strategy around mode mix, carriers, lanes, and visibility
- Use intermodal on lanes over 750 miles
- Consolidate, contract, and audit constantly
- Track the metrics that matter most
Heavy freight charges shouldn’t weigh your company down. Choose one or two tips from this article and begin putting them into practice now. You can save money…
You just need a plan to grab them.
