Transportation is an essential element of the supply chain, allowing the connection between suppliers and final customers and It also represents the largest component of the total logistics cost. This is why planning all the processes related to transportation is a fundamental activity to achieve success in your business.
Around 70% of all the shipments inside the US are completed by trucks. When choosing the right balance between capacity, speed and price, trucks are an incredible choice to transport goods to almost anywhere in the country. However, if you don’t properly planify how to move your products efficiently, you will end up losing your profitability. Below you will find some tips to maintain your cost under budget.
Determine your demand and production flow
The most important matter is to understand your market and predict possible fluctuations; this will help you to predict how much capacity you will need in order to satisfy your transportation needs. It is very important that if you don’t know your demand, at least you should create a forecast. This will help to have an idea of the freight volume you will be handling during a period of time.
Protect your budget
Create a budget and try to stick to it; this will force you to optimize resources and reduce your costs. Don’t forget to allocate resources for emergencies or unexpected events.
Consolidate your shipments
If possible, organize your shipments into big batches to reduce the cost per unit and keep your expenses under budget.
Select the right equipment
There are multiple equipment types for diverse purposes. However, sometimes you could use different equipment to handle the same cargo, saving money on the process. As an example, we could consider moving onions in flatbed depending on the weather conditions, notwithstanding the most common way to move the onions is by using reefer trucks. When you understand the specifications and advantages of different equipment types and you know which one is better to protect the integrity of your cargo, you could avoid risk and reduce your transportation cost significantly.
Outsource your logistics process.
If you are not an expert in logistics, you can rely on a third party expert in order to minimize transportation cost and save valuable time. By outsourcing part of your operations, you could invest all your time in those activities that generate more revenue and value to your customers.
Automate and streamline your process.
The automation of certain processes will avoid human errors and unnecessary delays. It will certainly save you a lot of money and time. There are many tasks that can be automated, creating a better shipping experience.
Here you will find some elements that could be easily automated to increase the efficiency of your process and reduce costs:
– Data processing
– Updates & Communications
– Tendering and Booking trucks
– Warehouse automation
– Labeling and packaging
The industry is changing fast, and automation could be the key to minimize transport costs. The first step, prior to the automatization, is to evaluate your current shipping process, analyze it and eliminate any kind of waste. We may not be able to eliminate all the costs, but we certainly can dismiss those who are not necessary.