How small shipping shifts can lead to big results
Did You Know?
97% of Priority & First Overnight packages arrive at the same time.
How small shipping shifts can lead to big results hospitals and health systems ship and receive hundreds of packages daily. These shipments hold major cost-saving opportunities, says Jason Hanson, HealthTrust’s Vice President of Supply Chain Solutions.
“Each time we’ve helped a member find freight savings, it’s been very meaningful to them financially,” Hanson says, “sometimes saving them millions.”
The HealthTrust Freight Management team looks at three overarching categories—hidden cost structures, shipment volume and logistics optimization—to find savings on freight costs, Hanson explains.
Hidden cost structures
Shipping has many nuances. For example, First Overnight guarantees delivery by 8:30 a.m. at around $180, while Priority Overnight offers 10:30 a.m. delivery for around $85–$90. Standard Overnight, which delivers by 3:30 p.m., typically costs just $55–$60.
“A study done last year found that when a facility had a First Overnight and a Priority Overnight shipment, 97% of the time, those shipments arrived on the same truck at the same time,” Hanson says. “The facility paid $180 for one of those packages and $90 for the other, and yet they were delivered at exactly the same time.”
“With Priority Overnight, the carrier guarantees delivery by 10:30 a.m.; this typically means the delivery is likely going to happen by 8:30 a.m. anyway. Once members are informed, they can begin to make choices that unlock freight savings.”
Another subtlety is how unmanaged freight is charged, Hanson explains. Most goods that are ordered by facilities include shipping per their negotiated contracts; however, some goods fall outside contract parameters, and the supplier adds shipping for those items. This is called “prepay and add.”
When you allow freight to ship prepay and add, make sure you are using HealthTrust’s negotiated carrier rate vs. the supplier using its freight account. Otherwise, you are likely to pay four to five times more than what it should cost you. Start reaping those savings by telling your suppliers to use your freight account number instead of theirs.
The HealthTrust team also helps members understand the subtleties of the freight contracts. “Each service level has a different discount structure,” Hanson explains. For example, it may be cheaper to ship Standard Overnight rather than Two-day Air. “You would think having something delivered the day after tomorrow would be cheaper than having it delivered tomorrow, but that’s not always the case if your Standard Overnight contract is actually cheaper than your contract for Two-day Delivery.”
Shipment volume
Additional savings can be found by ordering in multiples. Facilities often ship items one box at a time. “We help members understand that for every one box they ship, they could technically ship three for the exact same cost,” he says.
With planning, facilities can order five times weekly instead of 28, lowering freight costs by about 60%.
Logistics optimization
“One of the most advantageous things the HealthTrust Freight Management team does is to look at network optimization for a facility,” Hanson says.
“A well-run inbound freight program is about 80% ground shipments, and 20% is expedited shipping,” he adds. “What we typically uncover is that most hospitals and health systems are more like 50% ground and 50% express.”
Often, these facilities default to overnight shipping. When the HealthTrust Freight Management team gets involved, they examine shipment origins to determine if a ground shipment arrives as quickly as an overnight shipment.
For shipments delivered at the same time via ground service as overnight service, the HealthTrust team works with the specific suppliers to override the default overnight shipping. “We tell suppliers to ship these shipments via ground every time, even if the hospital orders overnight shipping,” Hanson says.
“When we do this maneuver, facilities see a huge shift in their freight costs—about 55% savings—even if we’re only affecting 30% of their shipping,” he explains.
HealthTrust reviews and explains ordering cycles. “Adequate lead time greatly impacts freight costs,” Hanson says. “The average healthcare box ships for $10 ground as compared to the same box shipping overnight at $90.”
With an understanding of the ordering cycle, the HealthTrust team helps facilities build lead-time triggers into their ordering systems so that the facility is taking advantage of lower priced ground shipping, rather than paying for expedited shipping because they waited too long.
“Because we do these analyses for some of the largest providers in healthcare,” he says, “we know what we’re looking for and what we should expect to see based on statistical averages. When we don’t see them, then we know there’s an opportunity to go find savings there.”
Share Email cost efficiency, Freight Management, logistics, Q3 2025
