Rate Shopping: What it is and Why You Need it

Posted on Jun 21, 2016 By cwilson Share:

Today, customers want more flexibility and delivery options when it comes to shipping. It is of utmost importance to find the optimal balance between speed and flexibility to get the item delivered the same day, the next day, in just a few days, down the street or around the world. How do you provide these options without incurring high shipping costs? This is where rate shopping comes in to play.

So what the heck is rate shopping?

The best carrier service is not necessarily based on the size of the package and the delivery date. With the right software, you can find a cheaper carrier service and your package will still arrive on the required delivery date. You can "rate shop" between major carriers for all service levels and special service options such as Saturday Delivery and Hold at Location, and can choose between all of the negotiated rates your company may have with each carrier, as well as the current published rates, for each package you send.

[Learn More in this On-Demand Webinar: How to Turn Shipping into a Competitive Advantage]

Why do you need it??

Rate shopping multiple carriers at a shipment level is a powerful tool to ensure least-cost alternatives and benefit from the value regional carriers could offer. By automating this process with shipping software, you will gain the best value with every shipment and gain the ability to leverage multiple carriers, while simplifying and streamlining your transportation decisions.

Also, it's always nice to save a few dollars here and there. With rate shopping, your average savings should exceed 5% of total annual carrier spend. For example, if your total carrier spend is $300,000 per year and you save just 5%, that calculates to a savings of $15,000 per year.

The power to automate rate shopping between your chosen carriers and service levels is a tool that every company in the shipping business should have in their back pocket. If you want to achieve a competitive advantage in the shipping world, you need to choose a vendor that provides sophisticated rate shopping software. By the end of the year, you'll have your competitors saying, "How'd they do that?!"

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