GPI 111 – Offer a slow freight rate to level your work load and capture those who do not mind slow.

Try a different approach to your delivery.  Offer a new option for your customers.  Companies send product to customers every day and many times brag about how quickly they respond with everything sent expedited freight.  What about the guy who plans well, orders early and does not absolutely have to have it overnight?  Should he pay for expedited shipments?  The answer to this possibly is the creation of a great niche part of the market for your firm.  You decide.

Offer a cheap rate – not everyone is a speed demon.  Offer a special freight program to customers that cuts expediting costs and overtime premium out to level your workload.  This expediting cost is built into the average cost of the customers’ products when freight is reflected in the price.  This becomes the normal course of business unless the customer is indifferent as to delivery date.

Some customers actually do not absolutely need it ‘overnight’.  If the customer does not need something early, feature a price that is cheaper if the item will be delivered within the next two weeks versus next two days.  Call and market it uniquely in your industry however you wish.  Try any of these if you wish; ‘Slower Smarter Rate’, ‘Slow Savers Program’ or ‘Snail Savers’.

Questions to ask customers about your Slow Freight Special:

Example:

• Before I place your order, is the two-day delivery date that you requested mandatory? The reason I ask is if you do not need this shipment within two days, we do have a new rate for those customers who buy ahead.  This lower rate allows them to save money if they can wait for shipment up to any time within two weeks.  The shipment is processed and will be shipped sometime within 14 days.  It can be shipped out any time within that window but costs anywhere from 3-5% less than the expedited shipment.  Would you be interested?  If not, just keep this program in mind if you are interested in further savings in the future when ordering.

Reduced overtime spent on expedited loads will offset the price cut.  One reason why you might want to offer this special rate is that expedited freight involves overtime expense for your company.  If the loads can be shipped anytime in the next two weeks, this levels out the work load and should cut back on overtime expense.  You will want to watch for peaks and valleys in workloads to smooth out cost.  You will also want to attempt to minimize all overtime as much as possible.  This will help offset the offered price reduction.