May 17, 2020

You've Got to Carrier Rate

Source Consulting
Luke Kupersmith
carrier rates
Freddie Pierce
3 min
Think of the savings!
Click here to read this article in the magazine edition! Shipping is much more complicated than it may initially seem and it is becoming an increasingl...

Click here to read this article in the magazine edition!

Shipping is much more complicated than it may initially seem and it is becoming an increasingly important area to save money in.  Today, we are living in a hyper-competitive business climate that is also fairly tough due to the economic downturn.  Concurrently, many businesses rely on carriers as a means to get their product to customers but only use one carrier exclusively.  However, many of these businesses don’t realize that both the tough economic environment and their shipping actually can go hand-in-hand in helping save the company money.  By understanding how to properly compare the rates of the shipping carriers, businesses can make simple and better cost-savings decisions. 

To understand why we only suggest comparing only two carriers, businesses need to understand the oligarchic structure of the shipping industry.  The shipping business is only made up of a few players, the biggest two being FedEx and UPS, who dominate the majority of shipments and the two that will most likely get your patronage.  This set-up also creates an easily visible but interesting scenario of brand loyalty.  Nearly 50 percent of large businesses exclusively choose one carrier versus the other in shipments via the air.  Understanding this fact can lead you to better comprehend why we do focus on only these two companies. 

Thus, it is important to constantly compare these two major shippers—doing so will readily show you differences in shipping rates and prepare you for a future carrier negotiation. One major aspect to remember when comparing prices is to not look at the two side-by-side directly.  Because the carrier’s base tariff and fee schedule can widely differ from the carriers, a 30 percent discount from UPS may not be the same for FedEx.  Instead, to accurately determine the difference between the rates from both carriers, calculate any applicable discounts, incentives and rebates first and then compare the actual net cost. 

Additionally, remember these tips as well when comparing the two carriers.  One note is to calculate and compare these numbers yourself before any actual negotiation takes place instead of relying on the respective representative to do the work for you.  Think of how you would negotiate a car—you would go in with your research that represents the amount you found in your research to compare and contrast with the dealer's numbers.  Also, you do not have to do these calculations on your own.  There are tools on the Internet that can help you figure out these comparison rates as well—many of which are free.

These numbers can help with the carrier negotiation process but are only one part of being able to get discounts for your shipping contract.  Make sure to conduct the appropriate research about the carriers and go in with a determined attitude.  With these different tools under your belt, you and your company can be well on their way to saving money on shipping and helping your company focus on what’s important to all of you - the content and the people. 

Share article

Jun 21, 2021

Elon Musk's Boring Co. planning wider tunnels for freight

2 min
Elon Musk’s tunnelling firm plans underground freight tunnels with shipping containers moved on “battery-powered freight carriers”, according to reports

Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports. 

A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers. 

Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US. 

The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two. 


Boring Co.'s new freight tunnels

The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.

The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete. 

Tesla’s supply chain woes 

Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue. 

Elon Musk Tweet

Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely

Top Image credit: The Boring Company / @boringcompany

Share article