It only takes one trip to the fueling station to realize how much gasoline and diesel fuel has risen in recent days. There seems to be no end to the spiraling costs associated with shipping merchandise. Freight rates are at an all time high. Whether shipping a complete eighteen wheel trailer or a single pallet, it makes good sense to fill the container to capacity whenever possible.
Stop Shipping Air
How much does freight add to the cost of merchandise? Divide the cost of freight by the cost of your merchandise.
Example: Freight Cost $ 2,000 / Merchandise Cost $ 10,000 = .20 (or 20%)
In the industry of customer returns, buyers look for cheap loads. Cheap loads will have higher freight costs per item because there is more AIR in the trailer. The amount paid for a small load could equal the cost of delivery. With the larger dealers like AML there is usually twice as much merchandise available if the buyer is willing to invest more in order to reduce freight expense. In other words, buying bigger loads will save on transportation! These savings will add to your bottom line.
Example: Freight Cost $ 2,000 (the same shipment) / Merchandise Cost $ 20,000 = .10 (or 10%)
More Merchandise & Less Air
The cost of freight can often determine if a sale is made or lost, at the wholesale level as well as the retail level.
Your success is important. Consider larger loads for greater profits.