The Hidden Truth Behind the LTL Discount

If I had a dollar for how each time I had to watch shippers bragging about how big of an LTL discount they were able to score, I’d be retired right now on some tropical island.

The fact is an LTL percentage discount doesn’t mean much until you know the base price they are working with.  This fact is something that will almost never be disclosed to you by the shipper. If you are shipping with an intensive Rolodex of LTL carriers, you know their biggest tool out of their competition toolbox is offering you a higher discount.

A high percentage discount isn’t helpful if their base price is significantly higher than the other guys.  I am certain that you have heard 10% of a hundred dollars is better than 99% of ten dollars - not exactly in those words, but you get the idea. The same rule applies for LTL discounts.  How many times have you invited the LTL sales rep to negotiate your shipping rates, only to find yourself in a bidding war of higher discounts?  I despise clichés, but in this instance it is truly important to compare apples with apples and know the bottom-line for once. This is why it is imperative to hire a logistics consultant to help you navigate that process, so once and for all you know what a true discount is.

It is also important to invest in empowering your shipping department - it’s worth the return.  When your own employees can feel confident to make solid business decisions that benefit the company, they will take greater pride in their work. 

In your business, time is the most precious commodity.  You can’t afford to have your shipping office wasting it trying to figure out which company to use when shipping and which route to take. You should bring all your carriers in and take service and cost into consideration and choose carriers that can cover your shipping needs and downsize other expenses.

If you decided that your company needs more help, consider inviting a logistics or shipping expert into your warehouse for a consulting session - you could save yourself some money and stress.  You may even leave that shipper who promised you the high percentage discount, or at the very least you will have a new negotiated rate.