Businesses must be mindful of their options to keep costs down and maintain profitability. Part of this is finding creative ways to reduce spending. One area often overlooked is purchasing power and how it impacts freight transportation costs.

Businesses need to remember that they are just some of the ones feeling the pressure to keep costs low. Most shippers are feeling this pressure.

So how can a business use its purchasing power within the logistics industry to its advantage? Here are twelve tips.

Tip #1: Focus on a Smaller Number of Carriers

A business can use its purchasing power to get ahead by focusing its shipments on smaller carriers.

When a business commits to shipping a large volume of freight with one or two carriers, it gives itself more negotiating power. This allows the business to ask for lower prices, capacity during peak seasons, and other factors that can impact the bottom line.

Tip #2: Consider Using Fewer Modes of Transportation

Another way to use purchasing power is by considering using fewer modes of transportation. Many businesses ship their products via multiple methods to get them to their final destination as quickly as possible.

However, this can often be more expensive than necessary. By working with one mode or another, businesses can receive discounts and other benefits that make shipping more affordable overall. Some businesses may find that they need to use multiple modes anyway because of the nature of their product or where it needs to go.

In these cases, businesses need to work with an experienced logistics provider who can help them navigate these waters and find the most cost-effective shipping solution.

Tip #3: Start a Relationship With an Integrated Logistics Provider

Building a solid relationship with an integrated logistics provider (ILP) can help your business negotiate more cost-effective freight transportation agreements. An integrated logistics provider can offer discounts based on your purchasing power and may also provide you with additional services, such as customs clearance or warehousing.

Additionally, these providers typically have extensive market knowledge and can provide valuable insights to help you find the most cost-effective solutions for your business.

Tip #4: Take Advantage of Consolidation Services

If you are shipping large goods, consider using consolidation services to reduce your freight transportation costs.

By consolidating shipments into fewer containers or trucks, you can significantly reduce the cost of transporting your goods. Additionally, you can negotiate discounts with a logistics provider for taking advantage of consolidation services.

Tip #5: Utilise Technology

Technology can also be a great asset in using purchasing power. Using tools like freight management software, businesses can get better visibility into the costs associated with their shipments. This allows them to make more informed decisions and proactively plan for the future.

Additionally, many online freight transportation platforms allow companies to compare rates and services from multiple carriers to get the best deal for their shipments.

Tip #6: Leverage Data for Improved Decision-Making

To properly leverage purchasing power, businesses must utilise all the data. This includes monitoring shipment performance, analysing costs regularly, and using market intelligence to stay ahead of trends.

By accessing this information, businesses can identify areas for improvement and make more informed decisions that can help them save money in the long run.

Tip #7: Take Advantage of Consolidation

Another way to use a business’s purchasing power is by taking advantage of consolidation.

Consolidating shipments with one or two carriers can often lead to lower rates due to the greater volume of shipped freight. This also gives businesses more control over their freight, limiting their exposure to potential pricing fluctuations.

Additionally, it can reduce transit times and improve delivery accuracy, helping companies stay competitive in this increasingly global marketplace.

Tip #8: Look for Incentives From Carriers

Businesses should consider the incentives carriers may offer to those who ship with them. Many carriers will give discounts or other rewards to those who regularly ship with them, so it’s worth checking in to see what kinds of deals are available.

Additionally, businesses should inquire about any seasonal promotions or other special offers that may be available to help bring down shipping costs even further.

Tip #9: Negotiate

Negotiation is also an essential part of using purchasing power in freight transportation. Businesses should be willing to talk with their carriers and logistics providers to secure better rates or services.

By understanding what’s available in the market and having a clear idea of what they need, businesses can negotiate more effectively and get the best deals possible.

Tip #10: Measure and Track Results

Businesses should take the time to measure and track the results of their efforts. This will help them determine which strategies are working and which may need improvement.

By regularly monitoring shipment costs and performance, businesses can identify areas where they can save money or improve efficiency, allowing them to make better decisions in the future.

Tip #11: Consider Working With a 3PL

Working with a third-party logistics (3PL) provider can be an excellent option for businesses looking for additional ways to leverage their shipping costs.

A 3PL is a company that specialises in managing the transportation of goods and services on behalf of its clients. By outsourcing these tasks to a 3PL, businesses can free up time and resources to focus on other areas of their business.

Additionally, 3PLs often have access to better rates due to their larger volumes of freight shipments. They can provide valuable data-driven insights to help businesses make more informed decisions about managing their supply chain.

Tip #12: Keep Flexible and up-To-Date

Finally, companies should stay flexible and ensure that they are always keeping up with the latest trends in the marketplace. Technology and market conditions can change quickly, so businesses must be prepared to adjust their strategies accordingly.

By staying on top of industry news and adapting their approach as required, businesses can ensure that they are using their purchasing power to the fullest and getting the best value for their shipping costs.


The tips above can be a great starting point if you’re looking for ways to reduce your shipping costs.

Companies can save money on freight transportation by taking advantage of a business’s purchasing power, negotiating with carriers and working with a 3PL.

Please contact us today to learn more about these services and how they can help your business.