Just a To-The-Point Reminder of Why Shipping Costs So Much

Empty pallets, empty containers, empty loads.

It’s essentially the same reason (airport) taxis usually cost more than Ubers. Empty space one way (in the form of seats).

Think about it. If a truck is coming empty from a big city 300 miles away to your plant to carry product back, every week, that’s over 15,000 empty miles a year on that one truck. A truck which takes a driver (who needs to be paid by the hour), gas (which costs by the gallon), maintenance, and replacement parts on an accelerated schedule. That means that you’re paying twice what you would be paying if the truck wasn’t empty for the majority of that 300 miles.

And even if you sub your shipping out to a logistics company, if the logistics company isn’t working hard enough on your behalf, that’s why certain lanes could be too high. And that’s also why you shouldn’t let a supplier or a single carrier manage your shipping. All carriers are going to have long empty lanes. You need to make sure that you’re cargo is not on these. You need to be sure that the truck isn’t driving more than a few hours from it’s drop off to your pickup (or your drop-off to it’s next pickup) so that the carrier is able to give you the lowest cost possible on the lane.

That’s why the best companies do global lane analysis (using decision optimization) and award contracts to multiple carriers that minimize costs across all lanes (by directly or indirectly eliminating the empty lanes).

So if you want to lower costs in your supply chain, just like you would avoid the empty calories in your diet, avoid the empty loads on your lanes.