Do transportation costs account for a significant portion of your company’s logistics expenses? It’s easy to forget about transportation logistics, but you’d do yourself a favour by looking for areas where you can make adjustments and bring down total transportation costs. The price of fuel seems to increase each year, and any inefficiencies in your supply chain can skyrocket expenditures even more. The following are three ways to start reducing your company’s transportation logistics costs.
1. Use Fewer Carriers
When delivering goods from suppliers to customers, you should note that in some cases, less is more. This applies to the number of carriers you work with. Your transport manager shouldn’t only focus on finding providers that offer the best prices. In most cases, this leads to multiple carriers being used because of your inability to look beyond upfront costs. Consider the bigger picture by discussing your unique requirements to different carriers. You might realise that sticking to a single carrier who can meet your needs proves to be the more cost-effective option in the long run.
In case you already have a fleet of delivery vehicles but your company cannot execute the delivery process efficiently, it’s time to think about hiring a third-party logistics solutions provider. You might be better off getting rid of your transport vehicles such as trucks and vans. And if you have motorcycles, consider selling them to we buy any bike to turn them into cash right away. The money can be invested in other areas of your business without negatively impacting your supply chain.
2. Consolidate Shipments
Working with a logistics solutions provider entails paying based on the weight of your goods, the distance traveled, and other variables. One strategy to reduce transportation costs is shipment consolidation. This involves combining two or more shipments so that more goods can be transported on the same vehicle to the same place. Your transport manager should work closely with your provider to find opportunities to consolidate shipments, even if it means combining your shipments with other companies.Larger shipments almost always come with huge discounts, so it’s a no-brainer to switch to this strategy where possible.
3. Manage Your Inventory More Effectively
A lack of supply chain visibility can lead to inefficiencies in your inventory management. If you have a tendency to stock excess inventory, it’s best to start keeping a closer eye on your sales to get a fairly accurate information about future orders. Stock up on high-demand items and be careful about seasonal products, as you wouldn’t want them to sit in the storage room for longer than they should.
With an optimised supply chain, your company guarantees that you can deliver exactly what your customers want precisely when they need it. While this proves to be a part of your day to day operations, don’t make the mistake of taking it for granted. It always pays off to find inefficiencies in your transportation logistics management to reduce overall transportation costs without compromising customer service.