Do your suppliers pre-pay your freight charges and pass the cost on to you?

If so, you may be paying up to 30% more on freight than is necessary. Regardless of the volume of product you order, your vendors pay carriers to move your freight and then pass the cost on to you, normally at an inflated price. Your vendors charge for freight in the following ways:

They prepay the freight, add a mark-up and then show the cost as a line item on your invoice.
They prepay the freight, add a mark-up and then "include" or "bury" the cost in your unit price.
They tell you that if you purchase enough product, freight is "free". Freight is never free.
They ship to you and you pay the carrier on an inbound collect basis with little or no discount.

In each of these scenarios, you are probably paying from 15% to 30% too much for the freight portion of your purchase. In addition, you are allowing your suppliers and vendors to totally control your inbound freight process.

Why are my suppliers and vendors so willing to prepay my freight and control my inbound freight process?

The reasons are simple:

Due to their volume with carriers, they receive a significant discount on their freight costs. They know they have a deeper discount than you can establish and they markup the freight costs which are passed on to you. This becomes a significant profit center for them and a cost center for you.
Since they are able to develop a strong relationship with their carrier, the carrier sets up quality and process programs that benefit them, but not necessarily you. This also allows them to limit the number of carriers at their dock and reduce congestion on their end. Since you are at the mercy of each vendor, you could have dozens of carriers delivering to you with no real relationship with any.
Your vendors have total inventory control. They often ship when it is most convenient for them, especially at month end. Since they choose the carrier, your ability to track or trace the shipment to determine when it will arrive is complex at best.

If you don't believe that your vendor/supplier is making a profit and benefiting from controlling your inbound freight, simply advise them that you plan to take control of the entire process and see how they initially react.

Why do purchasers and buyers allow their vendors to control the entire process?

They believe that…

allowing vendors to handle the process is easier and taking control is too complex and too much work,
you get a better price by putting each shipment out to "bid",
taking control will require additional staffing with specific expertise in this area,
they can’t establish pricing as good as "big" vendors,
vendors are controlling the freight as a reward for doing business with them,
they are receiving the shipping "free"

In addition,

they are afraid to have to file claims,
they have always done it that way,
there is a perception that they do not have any viable options

There is a simple solution for each of these issues.