Online home furniture sales in the United States have grown steadily, and researchers predict they will reach 3.1% growth this year. With the increase in online shopping and the demand for cheaper, faster shipping, retailers around the world agree that a major obstacle to maximizing profitability this year is shipping furniture well. As vacation planning begins, savvy shippers turn to an underutilized strategy to reduce risk and save money on shipping: expanding the carrier network.
What is freight network expansion and how does it work?
Expanding the freight network means increasing the number of carriers used to handle inventory deliveries, sometimes even using multiple carriers for a single SKU. “As deliveries are delayed in some areas and many carriers increase their rates, we are encouraging our customers to use more carriers to reduce their risk and avoid reliance on one or two carriers, especially this year. It has been a huge success, ”said Chris Randall, senior vice president of Freight Club, a fast growing market freight solution and a subsidiary of furniture retailer Cymax Group Technologies.
Considering a larger carrier network allows retailers not only to reduce risk, but also to take advantage of opportunities that would otherwise be overlooked – reduce costs, damage and expedite delivery. “A more diverse network allows our customers to select the optimal carriers for specific product types, allowing them to target low damage carriers for products that typically have higher damage rates and to select fast carriers. and cheap for products that usually don’t cause damage, ”says Randall.
How effective is it?
Using multiple carriers for a single SKU sounds simple enough, but does it work? “For a furniture retailer, we compared a multi-operator approach to their single-operator strategy and found an average savings of 20% for shipping a SKU,” recalls Randall. With such significant cost savings, this strategy can help offset the profit leakage due to rising freight costs and increased surcharges anticipated this holiday season.
The multi-operator strategy is not just aimed at reducing costs. Reviewing freight data to determine the best transportation opportunities can also help retailers improve customer service. “In the same analysis, we adopted a multi-operator approach but prioritized the upgrade of the delivery service. The retailer was pleased to see that not only were we able to upgrade the service from doorstep delivery to Room of Choice delivery, but we also saved a small percentage per shipment, ”recalls Randall.
Expanding the freight network – easier than ever
In previous years, expanding the operator network was not possible for most retailers, as most savings were only achieved by achieving significant volumes with a single operator. Now, with marketplaces and freight quoting tools like Freight Club, company-level fares are more accessible to SMEs. “If you want to implement this strategy before the holidays, using a tool like Freight Club will ensure you get volume rates across your WAN. Our team will also be happy to advise you on which carriers to use, ”says Randall.
Freight Club Consultants now offer a free price analysis that will compare the cost of shipping SKUs between different carriers, just in time for the holidays. If you want to protect your margins this holiday season, you can contact [email protected] and request a free scan.