Strategic Movements is used to find very low-cost routing solutions in a very short time, reducing the cost of planning trips and reducing the miles driven.
For most local delivery operations, the routes planned are round trips from a single terminal location with multiple stops placed on some set of vehicles.
Strategic Movements can also find those low-cost routing solutions for more complicated problems, like those facing shippers, or for freight brokers working for those shippers.
Generally speaking, there are three main ways to move freight (a load) from a warehouse or depot to consignees:
With a private fleet, the shipper can build round trips that take one or more days to complete. The costs for these trips are usually based on an hourly pay for the driver and the actual costs for the vehicles used.
Full Truckload (FTL) Carriers
FTL carriers provide one way service from the warehouse or depot to a consignee location. Multiple stops may be placed on a truck and the total cost is based on a rate per mile plus any other charges, like those for additional stops or other special services.
These carriers divide the country into geographic zones based on ZIP codes. The rate charged is based on the origin and destination zones. The actual rate depends mostly on the availability of another load in that zone. For example, there is little to pick up in South Florida, so the rate for a delivery there is higher than in most places in the Midwest, where there are many businesses with freight to ship.
Less Than Truckload (LTL) Carriers
LTL carriers also provide service from a warehouse or depot to a consignee location. Each load is picked up at the origin location, delivered to one of the carrier’s terminals, where it may be moved to another terminal, before finally being delivered to the consignee.
Each load is charged based on the distance the freight is moved, the weight, and the overall density of the freight. Moving 1,000 pounds of fiberglass costs more than moving 1,000 pounds of heavy machinery, since fiberglass takes up more of the space in the trailer than the machinery.
The artificial intelligence in the Strategic Movements assignment process looks at all combinations of private fleet and carriers and finds the lowest cost solution.
It has no preconceived notions. It only seeks the best overall solution, picking the carriers that can do the job for the lowest cost.
Some shippers have a preplanned way of making assignments.
They might always use a private fleet, even if it would cost less to use an LTL carrier on the days when there are very few orders at the edge of their normal delivery area.
In other cases, everything goes LTL, and the opportunities to use a FTL carrier are not even considered.
So, I would encourage all shippers to look at what they pay to move their freight and consider the value of reducing that by ten percent or more.
Strategic Movements offers a 30-day free trial so there is no risk in trying a new way of assigning loads to carriers. It is an easy way to see if there really is a way to reduce shipping costs.
We offer a free consultation to help you determine if a multiple carrier route optimization process is the way to achieve significant savings in both planning and actual transportation costs.
Whether you are just curious, thinking about a solution, or are ready to implement a process that will reduce transportation costs every day, sign up for the Strategic Movements News on our website and see what we can do for do.
We also have a new guide, “Reduce Your Transportation Costs With Route Optimization” available.
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