Freight Spend Management & Modal Optimization

Lower your freight spend — improve transit times and reduce costs

The tactical movement of selected freight between service types and carriers can drive savings and – with some strategies – improve transit times for both inbound and outbound packages. Additionally, if you’re a smaller volume shipper, you may benefit from one of our plug-and-play Special Rate Programs.

Learn More Special Rate Programs

How Modal Optimization Reduces Parcel and LTL Freight Costs

Modal optimization means choosing the best shipping mode, carrier, service level, and rate program for each shipment profile. Instead of assuming every order belongs with parcel or every heavier shipment belongs with freight, Shipware compares cost, transit time, service reliability, zones, weights, dimensions, accessorial exposure, and contract terms to identify the lowest total cost path.

That analysis helps shippers reduce freight costs without guessing. A shipment may stay with parcel when speed, density, and minimum charges make parcel the better fit. Another shipment may move from parcel to LTL when size, weight, destination, or accessorial charges make freight more economical. Regional carriers, 3PL options, and special rate programs can also improve the cost-to-service tradeoff when they match your customer geography and operational requirements.

Shipware combines shipping data, carrier contract knowledge, benchmarking, and implementation support to make those decisions practical. Related services include carrier diversification, parcel and LTL contract optimization, 3PL contract optimization, and parcel and LTL invoice audit and recovery.

Practical Decision Criteria for Shipping Mode Optimization

When parcel is the better fit

Parcel is often the right mode for smaller, lighter, time-sensitive packages, especially when your negotiated parcel discounts, minimum charges, and service commitments align with customer expectations. Shipware reviews package weight, dimensions, zones, residential delivery mix, and surcharge exposure before recommending a change.

When to shift parcel shipments to LTL

Parcel to LTL optimization becomes important when package size, weight, multi-piece shipments, or accessorial charges make parcel inefficient. For heavier or bulkier shipments, LTL freight optimization can lower cost per shipment while maintaining an acceptable transit window.

When regional carriers improve cost or transit performance

Regional carriers can be a strong fit when customers are concentrated in specific markets. They may provide lower rates, faster regional delivery, or more flexible service options than a national-only parcel strategy, while also supporting a broader carrier diversification plan.

When a 3PL or special rate program makes sense

A 3PL or special rate program may be appropriate when your internal volume does not qualify for the rates you need on its own, when fulfillment geography needs to change, or when a partner can provide access to better parcel, LTL, or regional carrier options. Shipware evaluates these choices against your operational constraints so cost reduction does not come at the expense of service quality.

Our Modal Pricing Optimization Process

Step 1

We analyze your shipping data

We break down services, zones, weights, accessorial surcharges, minimum charges, & more…

Step 2

Review your parcel, LTL, regional carrier, and 3PL options

We model your current spend against parcel, LTL, regional carrier, 3PL, and Special Rate Program options so you can compare total cost, transit performance, service reliability, and implementation requirements before changing your shipping mix.

Step 3

We help you implement your new rates

Whether plugging in one of our Special Rate Programs or engaging in an RFP, Shipware helps you every step of the way until your new best-in-class rate program is in place.

Why Modal Optimization or a Special Rate Program Is Right for My Business

You’re a small volume shipper

Not all businesses can leverage multi-million dollar shipping spends to gain the favor of carriers and attain big discounts. Smaller shippers have to be more tactical with their carrier and service choices, including parcel, LTL, regional carrier, 3PL, and Special Rate Program options that fit their volume profile.

Your customers are focused in specific regions

If your business mostly ships within one or a few regions, regional carriers can complement national service from FedEx, UPS, and USPS. Shipware compares regional carrier rates, transit performance, coverage, and contract effects to confirm the cost benefits are worth the operational change.

UPS? FedEx? USPS? DHL? You have no preference

When you are open to changing carriers or rate programs, Shipware can identify lower-cost combinations across parcel, regional carrier, 3PL, and Special Rate Program options. The goal is not switching for its own sake, but matching each shipment profile to the best total-cost service option.

You’re an occasional LTL Shipper

Not all shippers need to contract directly with a freight carrier. If you need occasional less-than-truckload (LTL) pickup and delivery, parcel to LTL optimization and special rates with major LTL carriers can reduce freight costs on shipments that no longer make sense as parcel.

Frequently Asked Questions

Does shifting volume from my primary carrier affect my rates?

Any time there is a dilution of freight from the primary carrier, it can impact the volume bonuses that carriers build into their contracts. It is not an accident that UPS and FedEx include these bonuses – it’s to discourage the use of regional carriers and the USPS. Shipware ensures the cost benefits of moving volume between carriers overcomes these carrier-imposed challenges while working to rightsize your Earned Discount or Portfolio Tier incentives to maximize savings.

What carriers do you offer special rates with?

Shipware has access to reduced rates for qualifying businesses with FedEx; DHL; the USPS; each of the major regionals including Dicom, OnTrac, LSO, Spee Dee, UDS, Lasership and Pitt-Ohio/US Cargo; and all the major LTL carriers.

Why would I consider using alternative shipping carriers?

Alternative shipping carriers can provide numerous benefits. These can include lower rates, faster delivery times, and more specialized services such as same-day delivery and handling options for specific items. Additionally, using alternative carriers will diversify your shipping operations, reducing risks associated with relying solely on a single provider. This strategy can lead to significant cost savings and improved transit times.

What factors should I consider when choosing an alternative shipping carrier?

When choosing a new shipping carrier, you should consider various factors, including:

• Type of products you're shipping
• Origins and destinations you're shipping to and from
• Weight and dimensions of your typical packages
• Price points of your products

Other factors include the location of your distribution center(s) and customers, the volume of your shipments, cost-effectiveness, and the desired delivery timeframe. It's also important to assess the carrier's reputation, use of technology, cost, transit times, and whether they offer guaranteed delivery to make sure you are making the best switch. All of this can be facilitated with Shipware experts.

How do different shipping carriers compare to traditional carriers I am used to, like UPS or FedEx?

Alternative shipping carriers can situationally provide more competitive rates and faster delivery times compared to traditional carriers like UPS or FedEx. They may also offer specialized services for special handling options, same-day delivery, international rates, and returns. However, traditional carriers like UPS, FedEx, and USPS have extensive global coverage, offer a variety of shipping options, and are known for their reliable service. Therefore, the choice between traditional and alternative carriers often depends on the specific needs of your business. However, savvy shippers often have a diversified carrier mix consisting of national and regional/alternative carriers to get the best of both worlds.

Can you give me an example of Modal Pricing Optimization?

There are many opportunities to move some classes of freight from one service to another and/or between carriers to drive incremental savings. Examples include upgrading selected Ground freight to a USPS Air product, moving Ground to a Deferred Ground option, or the same service levels between carriers for a portion of the freight spend.