All types of businesses run with one fundamental and basic goal, that is profit maximisation. Import/ export business is no exception to it. Every entrepreneur tries to lower the costs and increase the income of his business so that he can reap higher profits from the revenue. In the import/export business, freight charges hold a substantial share of expenses and if one can learn to crunch the costs paid as freights, he will be able to maximise his business’ profit margin making potential.
Freight costs depend upon a lot of factors like basic freight rates, container costs, customs, taxes, and other surcharges involved in the shipping process. Different logistics companies have different rate cards and one has to make a wise selection in order to avail the shipping facility at economical costs. You can calculate freight rates online for different shipping lines, then make a comparison between them & subsequently make a wise selection.
It is important to learn the ways of auditing freight rates so that you can achieve optimum cost-effectiveness in shipping your goods.
Freight audits help a shipper in examining and verifying the accuracy of the bills. If one evaluates it well, he can make a room for savings. If you too are eager to maximise your business’ revenue potential, you should follow a few tips and tricks to help you in that.
Given below are a few tips that you can apply to your next audit of freight rates while planning your next shipment.
- Group your shipping requirements properly: The first and foremost thing is to plan your shipments by grouping it as per time and place. Follow market trends, judge the time of peak season and track the fluctuations in freight rates. During peak seasons, freight rates are higher than usual. You can group your shipments and ship it earlier if you can to avoid higher freight charges.
- Go for FCL containers over LCL: The best option is to choose FCL containers for shipping your cargo. It is very cost-effective as you own the entire container and can use the space as per your wish. It involves low risks of rough handling which saves you from additional costs that might incur if your goods are damaged. You can ship your goods in a bulk which saves a lot of time as well.
- Optimise container capacity: FCL containers are much more economical if you know and learn to use its optimum loading capacity. Know the maximum capacity of the booked container and plan your shipments accordingly. Calculate the CBM of your shipments and then fill the container as per it to make sure you have utilised the worth of your money.
- Choose the right transportation: Air freights are more expensive than ocean freights. Try to avoid using air freights whenever and in whichever shipments you can so as to avoid paying triple freight charges.
- Digitalize audits: Manual audit process may involve mistakes and calculative errors. Digitize your billings and maintain a file in your PC. Improve your communication with your auditor and keep a record of your expenses. Highlight the points where you can cut off some extravagant and unnecessary expenses.
- Choose the right logistics company: This is as important as choosing the right business partner. Your logistics company should be reliable, reputed and experienced enough to help you with your shipping process. Look for a company that can provide you with the best offers, discounts on freight rates, warehouse and dockyard facilities, etc. The right logistics partner will help you gain the maximum revenue out of every shipment. The logistics company should also suggest you ways to achieve cost-effectiveness in the shipping process. Although this is less desirable from a logistics company, you should still learn the skills to get the work done in your favour. However, in doing this, never compromise with the quality and security of the shipment.
- Take a third-party help: Instead of doing the entire auditing in-house or by self, you can also choose to outsource the task to a freight auditing company. There are several such companies in the market who can get a thorough evaluation of your freight costs being incurred in a shipment and suggest you the ways to cut expenses. Although this will come against some charges, the assessment done by the experts and suggestions forwarded will be worth everything. In order to witness visible increment in revenue, you need to get the freight charges audited regularly for some period of time. Doing this job using individuals who are not expert at it will be wastage of resources and time. If you think that the freight rates are getting over a limit which is much more than your affordability, consider taking the help of a freight auditing firm.
Revenue maximisation is very important for not only reaping higher profits but also for succeeding in the industry. One must strive to seek out ways that can help him maximise his profits as well as contribute to the growth of the import/export industry of his country.
