How saving hundreds on freight can cost you thousands

When choosing a logistics service provider, there is more that needs to be looked at than rates and rates alone. Yes, we all like a bargin but then what are cheap rates actually costing you, especially in the long run? The choice you make when shopping for a carrier can compromise performance, and actually increase overall cost in the long run.

Beware the Hidden Costs!!!

When assessing your supply chain, make sure you look at the total cost of running your business’ operations. These include the hidden costs of freight distribution. They may not be obvious during price negotiations and are usually hidden under the surface, but they can do real harm to your overall profit.

1. Product Damage: When you’re running a transport and warehouse operation, some damage to your product is inevitable. But carriers with specialist freight handling techniques and technology can keep damage rates to a bare minimum. Some are willing to work with you to find other ways to minimise damage. And always ask whether they back their performance in case something goes wrong (transit warranty, assurance, etc).
How does your carrier manage compensation claims when damage happens? What’s their claims policy? What do these damage claims cost you in additional charges?

2. Freight loss: Lost or stolen freight can hamper your profits and compromise response rates. Businesses dealing with high-value products are at particular risk of losing goods during the transport process. Added to that is the fact that some goods might simply be irreplaceable or one of a kind. 
Does your carrier have policies and procedures to protect your goods, from pickup through to final delivery?

3. Split or late deliveries: Delivery in full and on time (DIFOT) is a critical marker of delivery performance. You’ll see at a glance how often your customers get the goods they want when they want them, and their satisfaction levels.
DIFOT becomes crucial in the face of stringent delivery deadlines, lost sales, and the penalties retailers often impose for late orders.
Make sure you ask any potential carrier how regularly they measure DIFOT, and whether they’re willing to share this information with you.

4. Customer dissatisfaction and defection: Poor carrier performance can cost you customers. And remember, dissatisfied customers are ten times more likely to share a bad experience than a positive one. 

5. Brand reputation: Missed delivery deadlines harm your brand’s reputation. Customers expect your business to be reliable, delivering within the promised time and cost.
This is especially vital when seasonality is a factor. Failure to deliver during key times (such as during the festive season), can seriously compromise a brand. Your transport partner should essentially be an extension of your business and share the same level of commitment to service as you have. 

6. Administration Costs: Carrier failure can mean you and your customers have to chase deliveries, often wasting time on automated phone systems and AI chat bots. A quality carrier helps you avoid these annoying delays by getting the job done right the first time. Meanwhile, you have the peace of mind to get on with your primary task, i.e. building your business.

Tips for Choosing a Transport and Logistics Partner

When making this important decision, make sure you get the full picture. Remember, there are extra costs associated with a low-quality carrier, and be wary of administration fees and surcharges.
Make sure you ask about hidden costs, and what kind of protections and service level agreements they’re willing to offer.

About AirRoad

For businesses that despatch high-value and time-critical freight by road in Australia, AirRoad provides a reliable service where consignments are consistently delivered in full and on time. 

Established in 1989, AirRoad is the only transport business that delivers a truly personalised service tailored to your specific requirements.