If you run a business that sells goods to consumers or other businesses then you know all about the complexities of logistics. You will also know all about the cost of logistics and how it quickly can become out of control and a nightmare to manage.
In this article, we discuss 5 simple ways to reduce your business logistics costs.
- Be Transport Flexible
It’s important to have an open mind and be flexible about the transport your company uses to deliver your goods. Each mode of transport has its advantages and disadvantages. You can weigh up which is the best mode of transport for each shipment depending on the delivery deadline, cost or type of product being shipped.
For example, let’s say you have a large order of heavy-duty products with plenty of time to ship. You could opt for shipping freight by sea which is significantly cheaper than alternatives like air freight. It takes longer than air but if you are clever with your delivery times it is plausible and you can save a lot of money.
- Consolidate Delivery Loads
A common problem for smaller companies who frequently ship small amounts of goods is that they have to take less-than-truckload shipping options. These often come at higher costs for your business.
A simple way to avoid this is to join forces with other companies of similar size to your own (even competitors) that are shipping to the same areas. This way you can share the cost of the shipments giving you all a lower shipment cost.
All you have to do is to speak to your truck driving companies to organize a plan on how you can do this.
- Set Up Warehouse Services
If you find that you are shipping a lot of goods to the same places over and over again it might be worth considering new warehouse services. You don’t need to build or buy a warehouse, you can now rent space in warehouses all across the country and pay a rental fee. You can then organize drivers to collect stock for you and deliver to your customers nearby offering a much quicker and cost-effective service.
- Use Smart Automated Systems
One issue that many smaller companies have with logistics is systems that only use an inventory against the current orders system. This often leads to our most important clients not getting what they want. First in/first out systems can be easily be manipulated by sales staff to win new customers too.
A great way to resolve these issues is to implement a smart automated logistics system that can make better decisions on inventory allocation taking into account customer importance.
- Use a Logistics Supplier
As mentioned at the beginning of this article, logistics is complex. Sometimes it can feel like all you do is spend your time on logistics and resolving issues. Not every company or manager is built to handle the logistics side of their business. A simple way to remove this stress from your business is to outsource your logistics needs.
A 3rd party logistics supplier (3PL) can help you quickly to set up and manage your logistics. They already have all the experience, skills, personnel and industry contacts to manage your logistics with ease. Spending money on a competent 3PL could save you a small fortune over the years and will save you tons of stress.