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The aim of every company is to reduce the cost of doing things and at the same time increase profitability. Poor planning on logistics and making immature decisions can lead to excessive spending, reduced customer trust due to late delivery or worse result to the damage of the product. Below we analyze some of the proven strategies that companies can adopt to reduce the logistics cost.

Consolidated Shipping

When shipping goods, for instance, most companies prefer the FCL- Full container loads over the LCL- Less than a container load thanks to its safety and cost effectiveness. For the start-up companies, their customer base is small, and some goods requiring shipping cases, are minimal hence doesn’t necessarily need individual transportation and the only solution in such a circumstance is consolidated shipment. This consolidation involves the combination of smaller purchases from several suppliers targeting a similar destination into a single consignment.

Insuring Your Cargo

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No matter how efficient your logistic and cost saving techniques happen to be, it means nothing if your cargo is not appropriately insured. You are hence required to engage several insurance agencies to learn about the different packages they offer and then choose one that fully covers the value of your goods.

Maximize the Use of the Company Assets

If you use the company resources such as vehicles, conservatively, you tend to spend a lot in terms of hiring logistic services and as a result affecting your revenue. Poor scheduling of business activities for example supplies are the key contributors to underutilization of business resources. It is hence imperative for you to rearrange events like the delivery schedules to help engage all your vehicles throughout the day. Similarly, if your company has a certain season in the year when its activities are on the peak, it is better to hire a warehouse at that time as opposed to renting one annually and probably for half the time it remains underutilized.

Proper Planning

Efficient operation plans like production schedule, transit time or shipping cases helps a lot in reducing logistic cost. If you rush during the last minutes, you are prone to make immature decisions that may result in missing out on deadlines and lead to a poor image of the company. It is hence important for you to consider time factor and effect a plan that will not affect your delivery time.

Use an Integrated Logistics Platform

Companies should take responsibility and put all its logistic plans in a single platform that all parties can access. This curtails duplication of activities that may lead to double delivery and result to losses on the company`s side.
If the above tips are applied by all companies, whether startup or grown, the problem of excessive spending on logistics will be minimized, and the profit of the agency increased.

 

References

https://www.aacb.com/reducing-logistics-costs-supply-chain-costs/

http://www.allcases.com/product-category/general-shipping-cases/

https://www.kaneisable.com/blog/5-ways-to-reduce-logistics-costs-in-consumer-goods-distribution

 

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