Cutting Transportation Costs To The Bone

As I have written here many times over the years, transportation and distribution are among your greatest costs. Any cost decrease has an immediate effect on your bottom line, so cutting costs is a compelling proposition that translates to more money – right away!

I have heard from many growers over the years who have followed the advice in my columns, and they have had great success. What I don’t understand is why more growers don’t implement these cost-cutting measures. If growers would merely simplify the fundamental elements of their businesses, they would not only stop wasting money but could focus their time on growing. 

So, here is your chance to cut your transportation costs to the bone. These four things will immediately slice at least 20 percent off your entire distribution costs.

Bid Your Freight Today

The available truck capacity in the market is greater than ever. Freight volumes are down in all industries (over 20 percent year to date) and drivers are plentiful – begging for a load, any load. 
In the good old days, if freight volumes were light, a driver would get out of his cab and work construction. Today, that is not an option. This has created an excessive number of drivers and trucks in the market – and so, it is a great time to bid out your freight and to lock in the savings.
Doing this is easy. You can hire an experienced third party who will charge you a flat fee for the project. The third party collects your lane data and sends it to thousands of carriers to bid (including your existing carriers). You then get a list of carriers who bid on each lane, from the lowest cost to the highest. For example, you may be paying $1.50 per mile today from Dallas to Mobile, Ala. 
But a new carrier needs that back haul and will do it for $1.30 per mile, or 13.3 percent less. These numbers add up quickly. If you spend $1 million per year on distribution and save 10 percent (a realistic goal), then you just put $100,000 back in your bank account.
If you have never conducted a lane bid for your business, you can realistically expect savings of 10 to 15 percent in freight costs.

Use A Transportation Management System

Savvy growers must remain informed about technology options that are available for every part of their businesses. Too often, growers will buy complex chemicals to fight disease or promote plant growth and vitality, but resort to whiteboards and paper to run their distribution efforts.
Transportation Management System (TMS) technology is affordable, effective and easy to implement. The latest and greatest trend is a Web-based, “on-demand” system. All you need is a Web browser and Internet connection to run the system. The only commitment you have is to convince your staff to use it. Once they do, they will realize technology should have been implemented years ago, and you will realize a decrease in overall costs and human errors.
A properly-used TMS will save your staff time, improve accuracy, better your customer relationships, allow reporting for future review and analysis, reduce claims and reduce your seasonal aspirin intake. If you run at least 10 loads per week (or 500 per year) and have aspirations to be a better, bigger company, you need a TMS. 

Don’t Own Trucks If Possible

I have never, ever met a grower who was happy to be in the trucking business. Many are in it, but only out of necessity. The trick is knowing when to own a truck and when not to. 
You should own a truck/trailer if your runs are short (less than 200 miles) and regular. Yes, that’s it! Any other reason costs you money. 
I can tell you nightmare stories of growers who obtained trucks and trailers because they thought they needed them. Years later, the “trucking operation” is a money pit. It provides more headaches than it is worth, and it detracts attention away from the growing operation. Moreover, the liability associated with a trucking operation is immense and requires mitigation through a complete separation of the trucking and growing operations – a huge and ongoing administrative task. 
Yes, in season you could certainly call the shots if you own your own trucks and provide better customer service. However, in the long term, you will lose money. A better solution is to partner with a competent 3PL (third-party logistics company) that can provide trouble-free transportation when you need it.
For the record, a local trucking company is often a poor compromise because it has other, year-round clients to protect and its trucks will often be in the wrong locations at the time you need them. 
So, choose a 3PL with the expertise and technology to help – and let it be your transportation department. A good 3PL will even help with your cash flow by offering driver advances, settling balances quickly and extending you net 30 terms.

Let Software Route Loads

In the horticulture industry, it is rare to see a “one pick/one drop” load. More often, it is a “one pick/14 drop” load (or more). 
I am amazed at the methods most growers use to optimize the trucks (to be as full as possible) and route them using the fewest number of miles to get the job done. Typically, they plot the deliveries on a map, draw a circle around the drops that appear to be near each other, and count up the amount of freight to see if it makes up a full truck. This can take hours – and is never correct.
A simple software solution will run millions of permutations to get the balance “just right.” My own optimization and routing department runs deliveries to hundreds of locations nationwide each day, and it takes mere seconds for the system to spit out the most effective results.
One grower we worked with last year provided us with some historical data for a national retail promotion they ran. We took the same data regarding the orders that were delivered and ran it through our optimization system. The savings: $75,224.25 saved in total ($467.23 per load). 

The Bottom Line

The most successful growers truly “get it” and are reaping the rewards of a well-executed logistics plan. 
Saving money on your logistics requires a change of thinking. The numbers in the example above are real, not theory. To achieve these kinds of savings requires a little investment in time and money, but the rewards are great.

Tim Higham is the CEO and president of Interstate Transport, Inc., a logistics provider to the horticultural market. You can e-mail Tim at Learn more at or call Tim toll free at 866-281-1281 x1323.

Leave a Reply

More From Finance/Operations...
Cape Fear Botanical Garden

November 27, 2015

National Garden Bureau Awards Grants To Three Therapeutic Gardens

The grants, totaling $10,000, are through the organization’s Growing For Futures program, which supports the growth of therapeutic gardens across the country.

Read More

November 26, 2015

2015 Metrolina Greenhouses (Huntersville, NC) Field Trials Results

See the 2015 field trials results for Metrolina Greenhouses in Huntersville, NC.

Read More
Yoshimi And Grace Shibata

November 26, 2015

American Floral Endowment Establishes Fund To Honor Legacy Of Yoshimi Shibata

Yoshimi “Shimi” Shibata, a flower grower and wholesale florist, passed away in October at the age of 100.

Read More
Latest Stories

November 25, 2015

Everything You Need To Know About the New England GROWS…

Held In Boston December 2-4, New England GROWS includes a comprehensive conference program, a trade show, and with six special programs that teach new skills and provide opportunities to network with colleagues.

Read More

November 20, 2015

Lessons Learned From The California Drought

For those of us who live in the areas of the country that experienced harsh winters and significant rain over the past three seasons, water has become a nuisance in some cases, rather than a blessing. I can’t count the number of times I have wished to be able to send the snow or the rain to the West Coast, tied up with a big red bow. But think about how we’d feel if we didn’t have the snow and the rain, and we were experiencing the same dry conditions that the residents of California, Oregon and Washington have. With fresh water supplies dwindling in regions of the world, and the resistance of residents in states like Michigan to share water from the Great Lakes, it’s likely that the next civil or world war could be fought over our most precious resource. California’s epic drought should cause everyone to look […]

Read More
Jill Calabro

November 3, 2015

AmericanHort Names New Research And Science Programs Di…

Jill Calabro will bring strategic direction and oversight to research funding by the Horticultural Research Institute, the research affiliate of AmericanHort.

Read More
SBI’s ANY Device Application allows growers to quickly determine availability-featuer

November 2, 2015

SBI Software’s Solutions Help Simplify Logistics For G…

The company focuses on helping growers improve their existing processes with solutions for site fulfillment, replenishment, inventory management and more.

Read More
Griffin Expo15 seminar

October 28, 2015

Griffin’s Hits Record Attendance With 2015 Expos,…

Griffin Greenhouse Supplies set new attendance records with its 2015 Expos. Its 2016 Expos are set for August 31 and September 1, 2016, in West Springfield, Mass., and September 21-22, 2016, in Lancaster, Penn.

Read More

October 28, 2015

Possum Run Greenhouses Taken Over By New Owners

Justin and Lynn Marotta have placed Possum Run Greenhouse and Gifts into the hands of new owners. John and Caroline Bletner, a newly married couple, took over the Bellville, Ohio, property October 2, according to an October 24 article in the Mansfield News Journal. The Marotta family has run Possum Run Greenhouse and Gifts for 41 years. When the Marottas announced in April the greenhouse operation was for sale, they said they were looking for an energetic couple to take the business to the next level, which is what they found in the Bletners, the article reports. The Bletners have hinted they’ll be “opening to a larger market” and that the retail side will “look different.” They’ll hold a grand re-opening the week of April 22, 2016. Staff are staying on board and the Bletners are maintaining many of the suppliers. The 200-plus varieties of fuchsias Justin brought to the greenhouse […]

Read More

October 25, 2015

We Could Be Growing More Green Infrastructure Plants Th…

At her Cultivate’15 presentation in July, Shannon Currey of Hoffman Nursery challenged the horticulture industry to get involved while green infrastructure is still developing, saying that a good start is to offer more plants that fit the unique needs of this market.

Read More
Integration Key To Compliance For Specialized Crops

October 22, 2015

Integration Key To Regulation Compliance For Specializ…

Growers considering supplementing ornamental crops with cannabis will enter into a new world of governmental regulations where key business systems will be indispensable for successful crop management.

Read More
Kate Santos Operations Director Dummen Orange

October 21, 2015

Kate Santos Explains What The Sale Of Dümmen Orange To …

Over the weekend, Dümmen Orange announced that the Dümmen family has sold its majority stake in the Dutch flower breeding company Dümmen Orange to European private equity firm BC Partners. The deal is valued at more than $560 million, around 11 times its core earnings, according to a Reuters press release. The company, owned by the Dümmen family and investment firm H2 Equity partners, has locations all over the world, including farms in Central America and East Africa. This is BC Partners’ first foray into the flower business. We caught up with Kate Santos, operations director for Dümmen Orange, to find out how the company’s sale to BC Partners affects Dümmen Orange customers, if at all. Here’s what she told us: Why did the Dümmen family decide to sell their shares? Why to a private equity investment company? Similar to the reason that H2 sold its shares to BC Partners, all […]

Read More
The tradeshow at the Cannabis Business Summit & Expo — outside of the occasional 1960s vibe, perhaps — would feel familiar to most growers

October 19, 2015

Have Cannabis Growing Expertise, Seek ‘Golden Ticket’

Many horticultural growers might start cultivating cannabis tomorrow if they could secure a license, the equivalent of a “golden ticket.” But these are hard to come by, and the number and criteria vary greatly by state

Read More
Lurie Garden Millennium Park

October 16, 2015

Green Infrastructure An Opportunity To Redefine How We …

Green infrastructure is an emerging market that has important ramifications for the horticulture industry. That is, if growers, designers and other industry players take a proactive approach to grasp the opportunities that come their way.

Read More

October 5, 2015

Smart Business Sense At Tidal Creek Growers Yields Succ…

Tidal Creek Growers stays competitive by focusing on what really turns a profit. It helps the large operation successfully balance contract growing with growing for retail garden centers.

Read More

October 4, 2015

ePlantSource Adds 5 New Partner Companies

ePlantSource has announced an additional five companies that have been added to its partner distribution list. Not only do the additional partners offer more supplier options to ePlantSource customers, but the website now also provides a more diverse product list with the addition of bulbs, clematis and many new varieties. New partners added for the 2015 – 2016 season: A.D.R. Bulbs Lennon Farm Greenhouses Micandy Gardens Pacific Growers Roseville Farms “We make it a priority to respond to our customers, and we have had many requests for additional options and a more diverse product line, so we are continually evaluating suppliers that work well with our non-traditional approach to the sale of live goods,” says Gary Falkenstein, President and CEO of ePlantSource. “We feel that it is good for our company, our customers and the industry as a whole to keep looking forward and seeing how we can improve and expand how […]

Read More
Cannabis marijuana

September 8, 2015

Supplemental Lighting Benefits For Growing Cannabis In …

The cannabis industry has moved out of the basement and into the light, and with this shift in politics and regulation occurring worldwide there is a need for growers to change the way they think about lighting and energy consumption.

Read More

September 2, 2015

Delegation Is Key To A Successful Greenhouse Operation

In a packed room at Cultivate’15, speaker Bernie Erven presented key steps growers need to take to improve their delegation skills, the benefits of delegating and the dangers of not learning how to delegate. This is a skill, he says, that everyone needs to learn. “For all of you who are part of a family business, you are choosing not to do things the easy way,” Erven laughed, as he presented a list of ways to know whether or not you’re an effective delegator. The owner of Erven HR Services, LLC, Erven has been working with and observing family businesses for many years. In his presentation, he said, he didn’t share anything that he hasn’t seen first-hand. You might not be a good delegator if you: Tend to be a perfectionist Work more hours than anyone else Lack time to explain clearly and concisely Are often interrupted Enjoy what you used to […]

Read More
AmericanHort logo

August 20, 2015

David Savoia To Serve As AmericanHort’s Interim P…

Following Michael Geary’s announcement that he has resigned as president and CEO of AmericanHort, the association has announced that CFO and Senior Vice President for Operations David Savoia will serve as interim president and CEO while the board conducts a search for a new staff executive. Craig Regelbrugge, the senior vice president for advocacy and research, will support Savoia with the association’s external affairs. Geary announced August 12  that he will be leaving his position after September 30 to serve as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” Geary said in an eMail. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me […]

Read More

August 18, 2015

Michael Geary Is Leaving AmericanHort

AmericanHort president and CEO Michael Geary announced last Wednesday that he will be leaving his position at the end of September to serve as CEO of the Society for Marketing Professional Services. “I am writing to share with you that on October 8 I will begin a new professional chapter as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries,” Geary said in an email. His last day with AmericanHort will be Sept. 30, 2015. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” he said. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me to be closer to my family and aging parents and to re-engage with another industry […]

Read More

August 15, 2015

Ball Horticultural Co. Buys Conard-Pyle/Star Roses And …

Ball Horticultural Co. plans to add Conard-Pyle/Star Roses and Plants to its family of breeding and distribution companies, according to a press release dated August 14, which announced the company’s recent acquisition of the famous introducer of Knock Out Roses and other perennials and woody plants to the market. Ball plans to capitalize on the expertise of its Ball Ornamentals woody ornamentals division, as well as Conard-Pyle’s market-leading position as a top rose breeder to strengthen its product line. The sale is scheduled to close by the end of September 2015. Conard-Pyle’s in-house breeding division NovaFlora, along with its intellectual properties and the distribution, production and administration facilities of its wholesale division are also part of the acquisition. NovaFlora is the driving force behind the Star Roses and Plants brand. “Conard-Pyle has been the leader in roses in its market and has been actively diversifying its offering with other woody […]

Read More
[gravityform id="35" title="false" description="false"]