8 Steps To Better Freight Optimization

We often talk about reducing costs, boosting business and uncovering new opportunities but seldom do we consider how end-to-end freight management can be optimised. 

Freight optimization goes way beyond merely determining the fastest route for a shipment. It involves multiple aspects right from sourcing raw materials to delivering the finished goods to the customer and much more. Modern-day shippers can quickly optimize their supply chain operations by using various freight management solutions to their advantage. 

Here are some steps that you can follow to optimize your freight operations and management: 

1. What are the available modes, what is the rate per shipment? 

The first step towards improving freight management is reviewing all the possible modes of transport for a shipment. Post that, you can consider how much the shipment will cost you if you select a specific mode. 

You can even consider each mode of transport’s pros and cons and accordingly make an informed decision. The key is that when we speak of optimisation, the idea is to complete the task in the most efficient way possible. Using international freight index tool to benchmark your freight rates can help you further enhance your negotiations. 

While you optimise your processes, you need to ensure that nothing comes at the cost of compromised customer service or experience. 

2. Diversify your carrier and vendor network

An efficient way to secure competitive rates is to expand your carrier and vendor network—more the competition, more the negotiations, and better the rates. 

It’s crucial to note here that increasing the vendor and carrier pool may not be practical in a traditional negotiation set-up. However, by adopting a freight management system, you can automate negotiations and potentially engage with as many vendors as you like. 

Systems like GoComet’s RFQ management module assure you the best possible rates via its innovative compounded negotiation system. The system is designed to conduct multiple automated negotiations with dynamic deadlines. It nudges your vendors to compete with each other to offer you the best rates. 

3. Assess risks and opportunities by exploring multiple routes 

Considering multiple routing options and analyZing the chosen route is a must. It makes route optimiZation possible and ensures cost-effectiveness.

Many times it offers a peek into new opportunities and markets. 

4. Leverage automation technology

You can leverage automation-based solutions by adopting a freight management software. The systems use artificial intelligence and machine learning algorithms to help you better plan your shipments, automate RFQ management, shipment tracking, invoice reconciliation and more. 

With automation to the rescue, you can free your team from repetitive and time-consuming tasks, allowing them to focus on more important work. 

5. Simpler the system, better the result 

 Adopting a freight management solution has numerous benefits. However, it’s crucial to note that you don’t need a fancy system that requires you to rush to your service provider’s support team every two days. 

It’s advisable to opt for an easy to use and integrate with the existing workflows system. The new-age cloud-based solutions have low implementation costs and can be updated and customised effortlessly to suit your needs. 

6. Don’t go overboard with customizable systems 

When you choose a freight management system, only modify it where it’s necessary. Even better, if you have clarity over the must-have features for your organization. Unnecessary features and customizations to the platform will not only add to the cost of the system but require complicated upgrades. 

If you’re stuck in the buy vs build dilemma, remember that state-of-the-art systems have a broad scope of functionality. These off the shelf systems can effectively meet or even exceed your essential requirements. So, in most of the cases, a few modifications suffice. 

7. Do your bit on the sustainability front 

Give your customers incentives to wait for their deliveries. In today’s day and age where everything has to be fast-paced, it’s natural for your customers to expect speedy deliveries. However, these deliveries come at the cost of the environment. 

You can consider raising awareness and encouraging sustainable, relatively environment-friendly practices. This is one instance where you can prioritise the greater interest of everyone over boosting the bottom line. 

8. Measure performance and focus on long term success

Too many things can get short-lived success. But the real improvement is when the operational efficiency and agility you build lasts in the long term. 

Make sure to have KPIs for every vital task and track the progress regularly. Long-term success undoubtedly requires sustained dedication and efforts. 

Shipment optimization offers significant advantages

Shipment optimization assumes a critical role in the performance of supply chain leaders across diverse industries. Its fundamental purpose is to efficiently deliver products to customers while upholding desired service levels, thereby driving cost reductions of anywhere between 10% and 40% if executed effectively.

When it comes to shipment optimization, there are some common misconceptions that can hinder businesses from achieving the best results. Let’s address two of these myths and provide some valuable insights to enhance the optimization process:

Myth 1: A Transportation Management System (TMS) platform is sufficient for shipment optimization.

Many businesses believe that utilizing a TMS platform alone will cover all their shipment optimization needs. However, while a TMS is essential for managing transportation operations, it might not offer a comprehensive approach to freight optimization. To maximize efficiency and cost savings, companies should consider adopting a visibility platform that goes beyond TMS capabilities. 

A visibility platform can provide a broader perspective, offering insights into areas like D and D freight bidding, invoice errors, and other optimization opportunities beyond just basic freight management. By leveraging such a comprehensive platform, businesses can unlock potential savings and identify new ways to optimize their entire supply chain.

Myth 2: Larger vendor pools always lead to significant savings.

It is a common misconception that having a large number of vendors automatically translates to substantial cost savings. However, the size of the vendor pool alone does not guarantee optimal results. Instead, what matters most is the process by which vendors participate and compete in the bidding process. 

Transparent platforms that allow equal participation from all vendors foster a fair and competitive environment. This ensures that vendors perceive value in the partnership and are motivated to offer competitive bids. Avoiding a monopolistic bidding situation is vital for maintaining healthy vendor relationships and achieving the best pricing for shipment services.

Here are five of the most important advantages:

Cost Savings: By optimizing freight operations, businesses can reduce transportation costs. This can be achieved through efficient route planning, load consolidation, and mode selection. Freight optimization helps minimize empty miles, improve fuel efficiency, and decrease labor costs, leading to substantial savings over time.

Enhanced Delivery Timelines: Freight optimization plays a pivotal role in streamlining operations and eradicating inefficiencies, leading to significantly improved delivery timelines for businesses. By optimizing routes, schedules, and load capacities, businesses can achieve faster and more reliable deliveries, thereby maximizing their operational capabilities and ensuring prompt and efficient customer service.

Enhanced Customer Service: With freight optimization, businesses can provide faster and more reliable deliveries to their customers. By optimizing routes, businesses can reduce transit times and improve on-time delivery performance. This leads to increased customer satisfaction, repeat business, and a competitive advantage in the marketplace.

End-to-End Visibility: When shipments are on optimized routes, there is less likelihood of deviations or unexpected changes, making it easier for businesses to maintain constant monitoring and tracking. This improved visibility ensures that all stakeholders, including suppliers, carriers, and customers, have access to timely and accurate information about shipment status, leading to better decision-making, reduced inefficiencies, and enhanced supply chain responsiveness.

Want to ensure complete freight optimization and build a cost-effective supply chain? Download our eBook Enterprise Freight Optimization Guide now and transform your logistics operations. 


What is freight optimization and why is it important?

Freight optimization refers to the process of maximizing the efficiency and cost-effectiveness of freight transportation. It involves strategic planning and the use of advanced algorithms to determine the most efficient routes, modes of transportation, and load consolidation. Freight optimization is important because it helps companies minimize costs, reduce transit times, improve customer satisfaction, and minimize their environmental impact.

How does freight optimization software work?

Freight optimization software utilizes algorithms and data analysis techniques to analyze various factors such as shipment volumes, transportation modes, distances, delivery time windows, and carrier rates. It considers constraints and objectives set by the user, such as cost minimization or delivery time optimization, and generates optimal transportation plans and load configurations to achieve these goals.

What are the benefits of implementing freight optimization?

Implementing freight optimization can provide several benefits, including reduced transportation costs through load consolidation and route optimization, improved delivery times and reliability, enhanced customer service and satisfaction, reduced carbon emissions and environmental impact, increased operational efficiency, better visibility and control over the supply chain, and improved resource utilization.

What data is required for effective freight optimization?

To achieve effective freight optimization, various data points are required, including shipment details (weight, dimensions, origin, and destination), carrier rates, transit times, carrier capacities, transportation modes, and any specific constraints or requirements. Historical data on shipping patterns and customer demand can also be valuable for forecasting and optimization purposes.

Are there different types of freight optimization strategies?

Yes, there are different types of freight optimization strategies depending on the specific goals and constraints of the business. Some common strategies include route optimization, load consolidation, mode selection (e.g., truck, rail, air, or sea), carrier selection, freight cost minimization, and delivery time optimization. The choice of strategy depends on factors such as cost considerations, customer requirements, service levels, and environmental sustainability goals.

What challenges are associated with implementing freight optimization

Implementing freight optimization can pose certain challenges. These include integrating optimization software with existing transportation management systems, ensuring data accuracy and availability, addressing operational constraints and complexities, managing change within the organization, and adapting to dynamic market conditions. Additionally, the success of freight optimization relies on the quality and availability of data, as well as the willingness of stakeholders to embrace new processes and technologies.